Best’s News & Research Service - December 18, 2020 10:22 AM (EST)
AM Best Affirms Credit Ratings of Securian Financial Group, Inc. and Its Subsidiaries
- December 18, 2020 10:22 AM (EST)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” of Minnesota Life Insurance Company and its subsidiary, Securian Life Insurance Company, together referred to as Securian Financial Insurance Group (Securian). AM Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” of Securian Casualty Company (Securian Casualty), and the FSR of A (Excellent) and the Long-Term ICR of “a” of Canadian Premier Life Insurance Company (Canadian Premier) (Toronto, ON).
Concurrently, AM Best has affirmed the Long-Term ICR of “a” of Securian Financial Group, Inc. (SFG) (Delaware) and the Long-Term Issue Credit Rating (Long-Term IR) of “a” of SFG’s $500 million, 4.8% senior unsecured notes, due 2048. AM Best also has affirmed the Long-Term IR of “a+” on the $125 million, 8.25% surplus notes, due 2025, issued by Minnesota Life Insurance Company. The outlook of all of the aforementioned Credit Ratings (ratings) is stable. All companies named above are headquartered in St. Paul, MN, except where specified.
The ratings reflect Securian’s balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).
Securian’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio, is assessed as strongest, and supports the group’s insurance, business and investment risks. Quality of capital is good, supported by retention of its XXX/AXXX reserves. Securian’s financial leverage and interest coverage metrics are supportive of its ratings. Invested assets are of high credit quality, with good sector diversification and modest allocations to higher risk assets. Earnings trends have been generally stable, although there have been some fluctuations across lines of business. There is also good diversification of earnings among mortality, spread margins and fee revenue. Premium growth has been robust and favorable compared with life industry averages. Also, the group holds leading positions in the markets in which it operates. Lastly, the company also benefits from diversification provided by Securian’s holding company, SFG, which includes the asset management and distribution businesses, along with its insurance operations.
The ratings of Securian Casualty reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM. Securian Casualty has established itself as a significant competitor in the contractual liability market, and continues to leverage its resources to support future product and market expansions. In recent years, Securian Casualty has focused on case management, which has further stabilized risk-adjusted capitalization and operating returns.
The ratings of Canadian Premier reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM. Since being acquired in 2017, Canadian Premier continues to be integrated into the Securian enterprise, as its business profile shifts towards credit business. While the company has reported positive earnings trends, its overall contribution to the group is modest. In addition, the ratings reflect its strategic importance and support from its parent.
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.