Moody's downgraded to Aa3 from Aa2 the insurance financial strength ratings of Massachusetts Mutual Life Insurance Co. and two of the company's subsidiaries, MML Bay State Life Insurance Co. and C.M. Life Insurance Co.

The outlooks of the ratings were changed to stable from under review. The ratings action mark the end of a review that Moody's started Oct. 18, 2018.

Moody's said that although MassMutual's financial profile is strong, it is now "better aligned" with Aa3-rated peers in terms of profitability, capital adequacy, liquidity and financial flexibility. The agency noted that MassMutual's five-year average statutory return on capital was zero percent, in part because of the statutory strain of selling participating whole life.

Also, the rating agency said the capital adequacy of MassMutual would decline from possible investment losses under stress, though the company's presence in the participating whole life market permits risk sharing with participating policyholders through the dividend mechanism, and asset quality "improved somewhat" since 2017.