We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (21,155)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (414)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (800)
  • Wink's Articles (353)
  • Wink's Inside Story (274)
  • Wink's Press Releases (123)
  • Blog Archives

  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • Fitch Affirms Symetra’s Ratings; Outlook Negative

    May 26, 2015 by Business Wire

    CHICAGO–(BUSINESS WIRE)–Fitch Ratings has affirmed the ‘A+’ Insurer Financial Strength (IFS) rating on Symetra Life Insurance Company (Symetra Life) as well as all ratings for Symetra Financial Corp. (Symetra), including the Issuer Default Rating (IDR) at ‘A-‘ and all outstanding debt issues. The Rating Outlook is Negative. A full list of rating actions follows at the end of this release.

    KEY RATING DRIVERS

    Fitch’s affirmation of Symetra’s ratings reflects the company’s strong balance sheet, consistent and diversified earnings, moderate financial leverage and lower-risk products. Additional strengths include the company’s good competitive position in the group medical stop-loss market and fixed annuities sold through banks.

    The ratings also consider Symetra’s lack of significant scale compared to other highly rated life insurers, moderate profitability and lower fixed charge coverage compared to rating expectations and similarly rated peers. In addition, the company relies upon its group medical stop-loss business to generate a significant but sometimes volatile source of earnings.

    The Negative Outlook is based primarily on Symetra’s high exposure to the continuing low interest rate environment and the effect on profitability, GAAP based fixed charge coverage and additional statutory reserving related to asset adequacy testing over the next 12 to 18 months. The company’s statutory reserves are adequate to support the policyholder contractual obligations under moderately adverse conditions as analyzed by year end 2014 cash flow testing results. Given its liability mix, Symetra is more exposed to this risk than peers due to its large legacy structured settlement and bank owned life insurance (BOLI) book. Longer-term, Fitch is concerned with the earnings implications of a prolonged low interest rate environment as spreads between earned rates and credited rates narrow.

    Symetra’s GAAP fixed charge coverage ratio is low for the rating, declining to 6.7X for the first three months of 2015 and 7.9x for full 2014. Fixed charge coverage is expected to be pressured in 2015 as interest expenses increase and earnings are challenged by low rates and the increase to normal loss ratios in the group benefits medical stop loss business. Statutory interest coverage based on maximum dividend coverage is expected to remain strong at over 4.7 times in 2015. In addition Symetra has approximately $100 million in committed cash at the holding company.

    Symetra’s profitability is below peers and moderate for the rating with operating ROE at 8-10% on a run rate basis. After GAAP profitability improved moderately to 9.6% for 2014, the company reported a decline in operating returns on equity to 6.5% for the first quarter 2015. Key drivers were an increase in stop loss benefit ratios back to normal ranges, lower mortality gains experience in income annuities, higher expenses related to growth initiatives and higher losses on hedge fund investments than in first quarter 2014. All segments reported lower pre-tax operating income in the first quarter 2015 compared to the prior year. Interest rate margins have remained generally intact and recent sales of employer medical stop loss, deferred and fixed index annuities continue to be strong while universal life sales continue to grow. Fitch expects Symetra’s earnings will be negatively affected in a sustained low interest rate environment.

    Symetra’s balance sheet remains a key strength for the rating with very strong capitalization, moderate financial leverage and a high quality, liquid investment portfolio. Statutory capital of Symetra Life is considered very strong with an RBC ratio at 464% at March 31, 2015. Symetra Life has a small captive reinsurer in place to manage reserve financing of its universal life book of business. Financial leverage is considered moderate for the rating at 22.6% at the end of the first quarter 2015 and operating leverage low for the rating and exposure to capital market funding is not excessive.

    Symetra’s risky assets declined to 79% of total adjusted capital at year end 2014 from 91% at yearend 2013 and us below the life industry average of 87%. Symetra’s bond portfolio has normally carried a greater than industry allocation of ‘BBB’ rated bonds and an average exposure to below investment grade bonds (BIGs). The company’s investment portfolio has higher than average exposure to commercial mortgages than the life insurance industry as this asset class has grown to over 15.5% of invested assets. Mortgage credit quality is considered high and mortgage performance has been very good with 99.9% of mortgages were in good standing at Dec. 31, 2014.

    RATING SENSITIVITIES

    Key rating triggers that could lead to a downgrade include:

    –Material additional statutory reserve strengthening driven by asset adequacy testing;

    –A decline in profitability to below 8%;

    –A deterioration in operating company capitalization sustained below 400% Risk Based Capital (RBC);

    –An increase in financial leverage above 25% or a decline in GAAP-based fixed charge coverage to below 8x on a sustained basis;

    –Material realized or unrealized losses in the company’s long-duration bond portfolio derived from sudden changes in market conditions, spiked interest rate levels, and credit spreads that lead to significant cash flow stresses or declines in capital.

    Rating triggers that could lead to an upgrade would be achieved over an extended period of time, and include:

    –Enhanced profitability to double-digit ROE levels;

    –Successful execution of its product diversification strategy;

    –Maintenance of strong capital levels in excess of 450% RBC and operating company leverage maintained near current levels or improved;

    –financial leverage below 20% and fixed charge coverage exceeding 12X.

    Fitch has affirmed the following ratings with a Negative Outlook:

    Symetra Financial Corp.

     

    –IDR at ‘A-‘;

    –6.125% senior unsecured notes due April 1, 2016 at ‘BBB+’;

    –4.25%. senior unsecured notes due July 15, 2024 at ‘BBB+’;

    –8.3% junior subordinated CENts due Oct. 15, 2067 at ‘BBB-‘.

    Symetra Life Insurance Company

    –IFS at ‘A+’.

    First Symetra National Life Insurance Company of New York

    –IFS at ‘A+’.

    Additional information is available at ‘www.fitchratings.com’.

    Applicable Criteria and Related Research:

    –‘Insurance Rating Methodology’ (September 2014);

    –‘Exposure Draft: Insurance Notching Criteria’ (May 2015).

    Applicable Criteria and Related Research:

    Insurance Rating Methodology

    http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=756650

    Exposure Draft: Insurance Notching Criteria (Proposed Methodology Changes)

    http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=865576

    Additional Disclosure

    Solicitation Status

    http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=985272

    ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM’. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.
    Contacts

    Fitch Ratings
    Primary Analyst
    R. Andrew Davidson, CFA
    Senior Director
    +1-312-368-3144
    Fitch Ratings, Inc.
    70 W. Madison Street
    Chicago, IL 60602
    or
    Secondary Analyst
    Julie A. Burke, CPA, CFA
    Managing Director
    +1-312-368-3158
    or
    Committee Chairperson
    Donald Thorpe, CFA
    Senior Director
    +1-312-606-2353
    or
    Media Relations:
    Alyssa Castelli, +1 212-908-0540
    alyssa.castelli@fitchratings.com
    Elizabeth Fogerty, +1 212-908-0526
    elizabeth.fogerty@fitchratings.com

    Originally Posted at BusinessWire on May 22, 2015 by Business Wire.

    Categories: Industry Articles
    currency