AM Best

JANUARY 27, 2021 05:11 PM (EST)

AM Best Comments on Massachusetts Mutual Life Insurance Co’s Acquisition of American Financial Group Inc’s Life Subsidiaries

 Frank Walko
Financial Analyst
+1 908 439 2200, ext. 5072

Rosemarie Mirabella
+1 908 439 2200, ext. 5892
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644


OLDWICK - JANUARY 27, 2021 05:11 PM (EST)
AM Best has commented that the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa+” of Massachusetts Mutual Life Insurance Company (MassMutual) (Springfield, MA) remain unchanged following its announcement that it plans to purchase the life insurance subsidiaries of American Financial Group, Inc. (AFG). In addition, the FSR of A++ (Superior) and the Long-Term ICRs of “aa+” of MassMutual’s operating insurance subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company (both domiciled in Enfield, CT), also are unchanged following the announcement. The Long-Term Issue Credit Ratings on MassMutual’s surplus notes of “aa-” and its notes issued under funding agreement-backed securities in MassMutual Global Funding, LLC and MassMutual Global Funding II of “aa+” also remain unchanged. The outlook of these Credit Ratings (ratings) are stable. The Short-Term Issuer Credit Rating of AMB-1+ also remains unchanged.

The $3.5 billion transaction will be paid in cash and include the following AFG subsidiaries; Great American Life Insurance Company, Annuity Investors Life Insurance Company, Manhattan National Holding Corporation, Manhattan National Life Insurance Company, Great American Advisors, which is a broker-dealer, and AAG Insurance Agency, Inc. The transaction is subject to customary regulatory approvals and is expected to close in the second quarter of 2021. Upon close of the transaction, Great American Life group will continue to operate as an independent subsidiary of MassMutual. AM Best notes that the transaction enhances MassMutual’s business profile, which AM Best has evaluated as very favorable, the highest descriptor in its credit rating methodology for the business profile assessment. Specifically, the acquisition will help foster MassMutual’s strategy to grow its independent channels in the banking, independent broker-dealer and independent agent channels where MassMutual currently has little presence, and expand its lifetime income product suite. The combined annuity sales from the transaction will improve MassMutual’s market share to a top-three ranking in the fixed annuity marketplace, and offers MassMutual the opportunity to cross-sell its existing products in the newly acquired channels. The transaction will be accretive to earnings, and while it is increasing MassMutual’s interest rate risk, it is expected to be manageable as the block has reasonable minimum interest rate guarantees with the potential to lower crediting rates to meet targeted spreads if needed.

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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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