JULY 22, 2020 05:15 PM (EDT)
AM Best Affirms Credit Ratings of New York Life Insurance Company and Its Subsidiaries
Senior Financial Analyst
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Manager, Public Relations
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FOR IMMEDIATE RELEASE
OLDWICK - JULY 22, 2020 05:15 PM (EDT)
AM Best has affirmed the Financial Strength Rating of A++ (Superior) and the Long-Term Issuer Credit Ratings of “aaa” of New York Life Insurance Company and its wholly owned subsidiary, New York Life Insurance and Annuity Corporation (collectively referred to as New York Life). Additionally, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IRs) on the funding agreement-backed securities (FABS) programs, the outstanding notes issued thereunder and the Long-Term IRs on the existing surplus notes of New York Life Insurance Company. The outlook of the Credit Ratings (rating) is stable. All companies are headquartered in New York, NY. (See below for a detailed listing of the Long- and Short-Term IRs.)
The ratings reflect New York Life’s balance sheet strength, which AM Best categorizes as strongest, as well as its very strong operating performance, very favorable business profile and very strong enterprise risk management.
The ratings reflect the group’s continued growth in absolute capital levels, solid liquidity and financial flexibility. The company is well able to continue operations under stressed scenarios, while maintaining sufficient liquidity. Reserves have become weighted toward annuity products, which exhibit potential pressure during long periods of low interest rates. However, this reserve profile is driven partially by the reserving dynamics between life insurance and annuity products, which generate higher reserves for the annuity products in the earlier years. In the current economic environment, there is a heightened potential for credit losses to materialize in the group’s investment portfolio, which could cause some decline in future risk-adjusted capital levels. The company has sufficient cushion in absolute and risk-adjusted capital levels to sustain a material increase in credit impairments. The group’s well-diversified investment portfolio provides protection from impairments within any specific asset class. Additionally, the investment portfolio is managed actively and modeled with management, demonstrating a complete risk profile, and tolerance levels should economic conditions materially decline.
The group has a history of very strong operating performance from a diverse revenue base, which provides the company with material amounts of room to absorb shocks to income in a potential adverse economic scenario. The business profile mix of life and annuity products provides risk diversification to the group’s business profile, as it holds market-leading positions in the segments it operates in.
The following Long-Term IRs have been affirmed with stable outlooks:
New York Life Funding—program rating of “aaa”
New York Life Global Funding—program rating of “aaa”
— “aaa” on all outstanding notes issued under the program
New York Life Insurance Company—
— “aa” on $1 billion 5.875% surplus notes, due May 2033
— “aa” on $1 billion 6.75% surplus notes, due November 2039
— “aa” on $1.25 billion 3.75% surplus notes, due May 2050
— “aa” on $1 billion 4.45% surplus notes, due May 2069
The following Short-Term IR has been affirmed:
New York Life Capital Corp—
— AMB-1+ on the commercial paper 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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.