A.M. Best Downgrades Ratings of Liberty Life Insurance Company; Removes Ratings From Under Review
May 6, 2011 by N/A
OLDWICK, N.J.–(BUSINESS WIRE)– A.M. Best Co. has downgraded the financial strength rating to B++ (Good) from A- (Excellent) and the issuer credit rating to “bbb+” from “a-” of Liberty Life Insurance Company (Liberty Life) (Greenville, SC). Both ratings have been removed from under review with negative implications and assigned a stable outlook.
The rating actions follow the previously announced acquisition of Liberty Life by Athene Holding Ltd.(Athene Holding) from the Royal Bank of Canada. As part of this transaction, substantially all of the life/health business of Liberty Life will be coinsured to Protective Life Insurance Company, and a portion of Liberty Life’s annuities will be coinsured to Athene Life Re, a Bermuda domiciled operating company of Athene Holding.
Liberty Life is Athene Holding’s main U.S. platform to accept annuity business primarily from U.S. primary insurers. A.M. Best believes Athene Holding has access to capital from its investor base, which consists of private equity and other institutional investors to fund its business plan over the medium term. Furthermore, A.M. Best believes the company’s investment expertise and strategy will enable Liberty Life to generate acceptable spreads on both new and in-force annuity business.
Partially offsetting these positive rating factors are the challenges of maintaining acceptable interest spreads over varying economic cycles and the untested nature of Liberty Life’s new business model.
The principal methodology used in determining these ratings is Best’s Credit Rating Methodology — Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “BCAR for Life and Health Insurers”; and “Rating Members of Insurance Groups.” Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
A.M. Best Co.
Anthony Mcswieney
Financial Analyst
908-439-2200, ext. 5715
anthony.mcswieney@ambest.com
or
Rachelle Morrow
Senior Manager, Public Relations
908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
William Pargeans
Assistant Vice President
908-439-2200, ext. 5359
william.pargeans@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
908-439-2200, ext. 5644
james.peavy@ambest.com
Source: A.M. Best Co.