A.M. Best Affirms Ratings of Global Atlantic Financial Group Limited’s Subsidiaries
November 23, 2015 by Best's News Service
Oldwick – A.M. Best has affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit ratings (ICR) of “a-” of the life insurance subsidiaries of Global Atlantic Financial Group Limited (Global Atlantic) (Hamilton, Bermuda). Concurrently, A.M. Best has affirmed the ICR of “bbb-” and the issue rating on $150 million 8.625% senior unsecured notes due 2021 of Forethought Financial Group, Inc. The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.)
The rating affirmations reflect Global Atlantic’s solid consolidated risk-adjusted capitalization, strong operating earnings with favorable return metrics and significant growth through recent acquisitions and increased direct sales. It also reflects the group’s diverse business mix comprised of reinsurance, direct individual life and direct annuity lines of business. A.M. Best expects premiums to continue to grow through these direct channels as the company focuses on core product lines. In addition, the company’s in-force blocks acquired through reinsurance continue generating steady cash flow and capital to support the new life and annuity sales.
Offsetting rating factors include the need for Global Atlantic to establish a longer term operational and financial performance trend line for its direct life and annuity lines of business, as well as the company’s ability to manage execution risk surrounding its growth. Additional factors include an elevated, although declining, exposure to structured securities within its fixed-income portfolio and an increased competitive environment in its targeted fixed index and index universal life markets. While the company has previously acquired mature distribution platforms, Global Atlantic’s direct business plan is viewed as fairly new under its current ownership structure. A.M. Best will continue to monitor the organization’s earnings, top line growth and capital adequacy.
The FSR of A- (Excellent) and the ICRs of “a-” have been affirmed with a stable outlook for the following life insurance subsidiaries of Global Atlantic Financial Group Limited:
- Commonwealth Annuity and Life Insurance Company
- Commonwealth Annuity and Life Reinsurance Company Ltd.
- First Allmerica Financial Life Insurance Company
- Accordia Life and Annuity Company
- Forethought Life Insurance Company
The ICRs of “bbb-” has been affirmed with a stable outlook for Global Atlantic Financial Group Limited, Global Atlantic Financial Life Limited and Forethought Financial Group, Inc.
The following issue rating has been affirmed with a stable outlook:
Forethought Financial Group, Inc.—
— “bbb-” on $150 million 8.625% senior unsecured notes, due 2021
This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.
A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.
