A.M. Best Places Ratings of Merrill Lynch Insurance Group under Review with Positive Implications

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has placed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of “a” of Merrill Lynch Life Insurance Company (Little Rock, AR) and ML Life Insurance Company of New York (New York, NY) (together known as the Merrill Lynch Insurance Group [MLIG]) under review with positive implications.

These rating actions follow the announcement of AEGON N.V.’s (AEGON) [NYSE: AEG], a leading multinational insurance organization based in The Hague, the Netherlands, proposed $1.3 billion cash acquisition of MLIG. The acquisition grants AEGON access to over 15,000 of Merrill Lynch & Co., Inc.’s (Merrill Lynch) [NYSE: MER] financial advisors while allowing MLIG the ability to offer a greater breadth of products through its affiliation with AEGON.

During the under review period, A.M. Best will focus its analysis on understanding MLIG’s integration plans with AEGON, its new branding strategies and capitalization plans for the MLIG entities. The positive implications reflect A.M. Best’s belief that this acquisition will bolster MLIG’s product manufacturing capabilities and result in a more diversified earnings stream for the MLIG entities. MLIG presently maintains a narrow product portfolio and a high correlation between its results and the performance of the equity markets.

Should the transaction not be completed, A.M. Best would need to re-evaluate the ratings of MLIG to reflect the more limited commitment of Merrill Lynch in supporting its direct insurance operations.

For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.