Best’s News & Research Service - May 11, 2021 10:55 AM (EDT)
AM Best Affirms Credit Ratings of Talcott Resolution Life, Inc. and Its Subsidiaries
- May 11, 2021 10:55 AM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “bbb+” of Talcott Resolution Life Insurance Company and Talcott Resolution Life and Annuity Insurance Company. These companies are domiciled in Windsor, CT, and collectively are referred to as Talcott Resolution Group (Talcott Resolution). Additionally, AM Best has affirmed the Long-Term ICR of “bbb-” of Talcott Resolution Life, Inc. (Delaware), along with its Long-Term Issue Credit Ratings (Long-Term IRs). The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the Long-Term IRs).
The ratings reflect Talcott Resolution’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
Talcott Resolution maintains the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), despite recent stockholder dividends, with good liquidity and a sufficient hedge program in place to protect statutory capital from any potential negative impacts due to equity and interest rate sensitivities within its core variable and fixed annuity businesses. Talcott Resolution’s variable annuity business continues to perform in line with reserve assumptions, despite some modest impacts to policyholder behavior caused by the COVID-19 pandemic. In addition, Talcott Resolution’s general account investment portfolio performed well over the past year with just minimal impairments and downward ratings migration as a result of the pandemic.
In January 2021, AM Best commented that the ratings of Talcott Resolution would remain unchanged following the announcement that Sixth Street, a leading global investment firm with over $50 billion in assets under management and committed capital, had entered into a definitive agreement to acquire the group from a consortium of investors. These investors are led by Cornell Capital LLC, Atlas Merchant Capital LLC, TRB Advisors LP, Global Atlantic Financial Group Limited, Pine Brook, J. Safra Group and The Hartford Financial Services Group, Inc. The transaction is expected to close before the end of the second quarter of 2021. AM Best believes that Talcott Resolution will continue to remain well-capitalized and will maintain its current business strategy of attempting to grow its platform by providing risk transfer solutions to the insurance industry through reinsurance or legal entity acquisitions.
The following Long-Term IRs have been affirmed with a stable outlook:
Talcott Resolution Life, Inc.—
— “bbb-” on $250 million 7.65% senior unsecured debentures, due 2027 (approximately $80 million outstanding)
— “bbb-” on $400 million 7.375% senior unsecured notes, due 2031 (approximately $63 million outstanding)
Hartford Life Institutional Funding—“bbb+” on program rating
— “bbb+” on outstanding notes issued under the program
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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.