A.M. Best Affirms Credit Ratings of Great-West Lifeco, Inc. and Its Subsidiaries
July 21, 2017 by Best's News Service
Oldwick – A.M. Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” of The Great-West Life Assurance Company (Winnipeg, Manitoba) and its affiliates, London Life Insurance Company (London, Ontario), The Canada Life Assurance Company (CLAC) (Toronto, Ontario), Great-West Life & Annuity Insurance Company (GWL&A) (Greenwood Village, CO) and Great-West Life & Annuity Insurance Company of New York (New York, NY). Concurrently, A.M. Best has affirmed the Long-Term ICR of “a” and the existing Long-Term Issue Credit Ratings (Long-Term IR) of Great-West Lifeco, Inc.(Lifeco) (Winnipeg, Manitoba). The outlook of these Credit Ratings (ratings) is stable. (See link below for a detailed listing of the companies and ratings.)
The rating affirmations reflect the group’s highly diversified earnings profile by product and geography, strong market position in its core business lines and solid regulatory capital levels. Lifeco maintains diversified insurance, reinsurance and financial services operations, along with its solid enterprise risk management capabilities. The organization has consistently generated significant cash flows from operations and has demonstrated its ability to manage financial leverage and interest coverage within A.M. Best’s expectations for its current ratings. In addition, Lifeco maintains an excellent liquidity posture supported by high-quality investments and credit facilities.
Moreover, A.M. Best recognizes Lifeco’s consolidated position as a market leader in Canada’s individual and group insurance lines, with superior market positions in the wealth accumulation and protection segments. The Canadian distribution systems of Lifeco and its operating companies represent the largest in Canada and serve as a significant competitive advantage, while its conservative pricing discipline and scale enables it to generate favorable operating results. The U.S. operation continues to produce stable earnings contributions, and has grown organically and through strategic acquisitions. The European business segments provide further diversification and also have grown significantly through acquisitions as well.
The ratings also reflect the challenges and risks associated with the current low interest rate environment and equity market uncertainty. Also noted is Lifeco’s large amount of goodwill and intangibles due to strategic acquisitions. In addition, A.M. Best expects that the group will continue to face challenges associated with growth in its core U.S. business segments due to the highly competitive environment. As the global economy and regulatory environment evolves, A.M. Best expects that any potential growth strategies will require a more stringent focus and a longer time horizon to realize meaningful results.
For a complete listing of Great-West Lifeco, Inc. and its subsidiaries’ Financial Strength, Long-Term ICR and Long-Term IRs, please visit Great-West Lifeco, Inc.
This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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