Best’s News & Research Service - July 14, 2022 04:19 PM (EDT)
AM Best Affirms Credit Ratings of Global Atlantic Financial Group Limited and Its Subsidiaries
- July 14, 2022 04:19 PM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) of Commonwealth Annuity and Life Insurance Company (Brighton, MA), First Allmerica Financial Life Insurance Company (Brighton, MA), Forethought Life Insurance Company (Indianapolis, IN), Accordia Life and Annuity Company (Des Moines, IA), and its affiliates, Global Atlantic Re Limited (Bermuda) and Global Atlantic Assurance Limited (Bermuda). Together, these subsidiaries are referred to collectively as Global Atlantic Group (Global Atlantic). The outlook of the FSR is stable, while the outlook of the Long-Term ICRs is positive. AM Best also has affirmed the Long-Term ICR of “bbb” (Good) of Global Atlantic Financial Group Limited (Bermuda). The outlook of the Long-Term ICR is positive.
The Credit Ratings (ratings) reflect Global Atlantic’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
The positive outlook of the Long-Term ICRs represents the improvement in Global Atlantic’s business profile through strategic growth in flow reinsurance, pension risk transfer and other product blocks. With the close of the KKR Company, Inc. (KKR) transaction in February 2021, AM Best anticipates that this rating factor likely will be enhanced further through more reinsurance opportunities and continued profitable execution of its business strategy.
Global Atlantic’s balance sheet continues to be supported by its adequate risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), complemented by a strong asset-liability matching program. Investment risk, while diversified and well-managed to date, does provide a potential for greater volatility. Global Atlantic maintains a favorable market position in its core annuity, life insurance and reinsurance segments – a key driver for premium and earnings growth for the company.
Global Atlantic’s profitability has continued through several years of risk reduction and strategic business initiatives and the recent investment by KKR. It is noted the accounting of the investment in Global Atlantic by KKR has created some distortion in reported earnings due the Purchased Accounting method used for the transaction. This does not change the anticipated future expectations for the company.
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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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.