S&P Global Ratings downgraded the insurer financial strength and issuer credit ratings of Japan-based MassMutual Life Insurance Co. to A- from A+ due to indications that the insurer has become less strategically important to the wider MassMutual Financial Group.
The outlook on the ratings is stable.
S&P expects the Japanese insurer to continue to receive support from its ultimate parent, Massachusetts Mutual Life Insurance Co., in the medium to long term.
The downgrade follows a shift in the group's investment strategy for its international business, which can be seen in its decision to sell a majority stake in Hong Kong-based MassMutual Asia Ltd., S&P said. The rating agency said it expects the group to maintain its investments outside the U.S. However, it may not pursue opportunities through its wholly owned subsidiaries in view of higher growth in the U.S. market.
S&P said it could upgrade MassMutual Life Insurance's ratings in the next two years if the insurer's standalone credit profile improves. Conversely, it could lower the ratings if the insurer's capital adequacy level declines to an inadequate level.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.