AM Best


JANUARY 29, 2021 06:20 PM (EST)

AM Best Downgrades ICRs of Members of Allstate Life Group; Comments on The Allstate Corporation and Other Subsidiaries


CONTACTS:
 Kate Steffanelli
Senior Financial Analyst
+1 908 439 2200, ext. 5063
kate.steffanelli@ambest.com

Edin Imsirovic
Associate Director
+1 908 439 2200, ext. 5740
edin.imsirovic@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - JANUARY 29, 2021 06:20 PM (EST)
AM Best has downgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to “aa-” from “aa” and affirmed the Financial Strength Rating (FSR) of A+ (Superior) of Allstate Life Insurance Company and Allstate Assurance Company. In addition, AM Best has placed these Credit Ratings (ratings) under review with negative implications. These companies are known collectively as Allstate Life Group (Allstate Life) and domiciled in Northbrook, IL. Concurrently, AM Best has downgraded the FSR to A (Excellent) from A+ (Superior) and the Long-Term ICR to “a+” from “aa” of Allstate Life Insurance Company of New York (Allstate Life NY) (Hauppauge, NY). The Long-Term ICR outlook for Allstate Life NY was revised to negative from stable, while the outlook on the FSR is stable. In addition, AM Best has affirmed the FSR of A+ (Superior) and Long-Term ICR of “aa” of American Heritage Life Insurance Company (Jacksonville, FL). The outlook of these ratings is stable. Concurrently, AM Best has commented that the ratings and outlooks of The Allstate Corporation (headquartered in Northbrook, IL) and its other property/casualty entities, including the FSR of A+ (Excellent) and the Long-Term ICR of “aa” of Allstate Insurance Company, remain unchanged.

The ratings of Allstate Life reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, favorable business profile and very strong enterprise risk management (ERM).

These rating actions follow the announcement that The Allstate Corporation (Allcorp) [NYSE: ALL] has agreed to sell Allstate Life to entities managed by Blackstone for $2.8 billion, inclusive of a pre-closing dividend of $400 million. The sale will allow the Allcorp to concentrate on its strategy to grow market share in personal property-liability and expand protection solutions for customers. Additionally, the transaction reflects the company’s commitment to reduce its exposures to annuities and the investment risks associated with spread-based products. The downgrade of Allstate Life’s Long-Term ICR reflects the removal of rating lift as a result of Allstate Life’s reduced importance to Allcorp’s business strategy and profile. The under review with negative implications status reflects AM Best’s need to fully assess the financial and operational impacts of the transaction on the rating fundamentals of Allstate Life. Given that Allstate Life’s ratings also currently benefit from the business profile and ERM processes of Allcorp, the sale has the potential to result in further negative rating action at closing, pending discussion with Allstate Life’s future parent, Blackstone. AM Best expects to resolve the under review with negative implications status upon the completion of the transaction and regulatory approval, which are expected in the second half of 2021.

The ratings of Allstate Life NY reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and very strong ERM.

The rating downgrades of Allstate Life NY follow Allcorp’s decision to pursue strategic alternatives related to this entity. Given this change in strategy, rating lift has been removed and AM Best’s assessment of Allstate Life NY’s business profile has been lowered. The revision of this company’s Long-Term ICR outlook to negative reflects potential pressure on its operating performance resulting from strategic alternatives such as sale or risk transfer to a third party.

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.


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