A.M. Best Downgrades Ratings of Investors Insurance Corporation
July 20, 2011 by N/A
OLDWICK, N.J. July 19 (BestWire) — A.M. Best Co. has downgraded the financial
strength rating to B++ (Good) from A (Excellent) and the issuer credit rating to
“bbb+” from “a” of Investors Insurance Corporation (IIC) (Wilmington, DE). Both
ratings have been removed from under review with negative implications and
assigned a stable outlook.
The rating actions follow the close of the
previously announced acquisition of IIC by Athene Holding Ltd. (Athene Holding)
from SCOR Global Life U.S. Re Insurance Company (SCOR U.S.). IIC’s ratings were
enhanced by a financial guarantee provided by SCOR S.E. (SCOR), the ultimate
parent of SCOR U.S., and the ratings reflected this guarantee along with other
ongoing support provided by SCOR. The financial guarantee remained in place
until the close of the transaction. In a press release dated February 23, 2011,
A.M. Best communicated that upon regulatory approval and completion of the sale,
the ratings would most likely be downgraded to IIC’s stand-alone credit risk
profile.
As part of this transaction, a portion of IIC’s annuity reserves
will be ceded to Athene Life Re, a Bermuda domiciled reinsurance subsidiary of
Athene Holding. Liberty Life Insurance Company, Athene Holding’s subsidiary and
its primary U.S. retail annuity sales platform will provide operational support
to IIC.
Reflected in the ratings is A.M. Best’s belief that Athene
Holding has access to capital from its investor base, which consists of private
equity and other institutional investors to fund its business plan over the
medium term. Furthermore, A.M. Best believes Athene Holding’s investment
expertise and strategy will enable IIC to generate acceptable spreads on both
new and in-force annuity business.
The principal methodology used in
determining these ratings is Best’s Credit Rating Methodology — Global Life and
Non-Life Insurance Edition, which provides a comprehensive explanation of A.M.
Best’s rating process and highlights the different rating criteria employed.
Additional key criteria include: “Understanding BCAR for Life and Health
Insurers”, “Assessing Country Risk”; and “Rating Members of Insurance Groups.”
Methodologies can be found at http://www.ambest.com/ratings/methodology.BN-NJ-07-19-2011 1607
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