AM Best

A.M. Best Revises Outlook to Positive for Wilton Re Ltd and Its Subsidiaries


Edward Kohlberg
Managing Senior Financial Analyst
+1 908 439 2200, ext. 5664

William Pargeans
Assistant Vice President
+1 908 439 2200, ext. 5359

Christopher Sharkey
Manager, Public Relations
+1 908 439-2200, ext. 5159

Jim Peavy
Assistant Vice President, Public Relations
+1 908 439-2200, ext. 5644


OLDWICK - APRIL 29, 2016 10:29 AM (EDT)
A.M. Best has revised the outlooks to positive from stable and affirmed the financial strength rating of A (Excellent) and the issuer credit ratings (ICR) of “a+” for Wilton Reinsurance Bermuda Limited (Bermuda), Wilton Reassurance Company (Minneapolis, MN), Texas Life Insurance Company (Waco, TX), Wilton Reassurance Life Company of New York (Rye Brook, NY), Wilcac Life Insurance Company (Chicago, IL) and Wilco Life Insurance Company (Carmel, IN), collectively referred to as Wilton Re.

A.M. Best has also has revised the outlooks to positive from stable and affirmed the ICRs of “bbb+” for Wilton Re Ltd (Nova Scotia, Canada) and Wilton Re Finance, LLC (Wilton Re Finance) (Delaware), as well as the issue rating of “bbb+” on the $300 million 5.875% senior unsecured notes due 2033 of Wilton Re Finance. The notes are unconditionally guaranteed by its parent, Wilton Re U.S. Holdings, Inc. and the ultimate parent, Wilton Re Ltd. A.M. Best notes that Wilton Re Ltd’s adjusted financial leverage and interest coverage are within A.M. Best’s expectations.

Additionally, A.M. Best has affirmed the FSR of A (Excellent) and the ICRs of “a” of ivari (formerly known as Transamerica Life Canada) (Toronto, Ontario, Canada) and Canadian Premier Life Insurance Company (CPL) (Toronto, Ontario, Canada). The outlook for each of these ratings is stable.

The revised outlook reflects Wilton Re’s solid risk-adjusted capitalization level, consistently strong operating earnings on its U.S. business and high quality balance sheet and stable liability structure, which are principally focused on mortality risk. The company continues to take a disciplined approach to growth by only acquiring blocks of primarily mortality business that are within their target margin levels. The ratings and outlooks also recognize the ongoing commitment by the company’s highly rated ultimate parent, Canada Pension Plan Investment Board (CPPIB), to provide capital to Wilton Re in support of continued growth. This support was demonstrated by the parent company’s funding of Wilton Re’s $1.2 billion XXX/AXXX statutory reserve refinance and funding for the completed acquisition of ivari in the third quarter of 2015. While Wilton Re’s operations generate significant capital, which can be deployed to fund growth, A.M. Best believes that the CPPIB would provide additional funding, if needed.

Partially offsetting these positive rating attributes is the impact of the continued low interest rate environment, which has modestly impacted earnings on fixed income investments. Operating results in 2015 also were dampened by adverse mortality trends for the industry during the period. Other offsetting rating factors include potential execution risks and competition associated with acquiring larger blocks of business. Additionally, Wilton Re has also incurred some earnings volatility, reflecting ivari’s accounting sensitivity to changes in Canadian interest rates and equity markets.

This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.

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