OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of Minnesota Life Insurance Company (Minnesota Life) and its subsidiary, Securian Life Insurance Company (Securian Life). In addition, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a” of Securian Casualty Company (Securian Casualty). These subsidiaries form the core insurance operating entities of Securian Financial Group, Inc. (SFG) (Delaware), whose ultimate parent is Minnesota Mutual Companies Inc. (MMC). Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and ICRs of “a-” of the remaining life insurance subsidiaries of SFG. (See a complete listing of these companies and ratings below.)
In addition, A.M. Best has assigned an ICR of “a-” to SFG (an intermediate holding company under MMC) and affirmed the debt rating of “a” on $125 million 8.25% surplus notes due 2025, issued by Minnesota Life. The outlook for all ratings is stable, and all companies named above are domiciled in St. Paul, MN, except where specified.
The ratings reflect Minnesota Life’s strong capitalization levels, positively trending top line revenue growth and stable statutory and GAAP earnings. Additionally, the ratings reflect the diversified operating profile, with core business lines—individual, financial institutions (life and specialty P/C), retirement and group—that provide well balanced and complimentary sources of revenues, cash flows and earnings. The group’s enterprise risk management framework is well developed and is reflected in the high credit quality of its insurance product portfolio, good liquidity profile and the overall high quality of its balance sheet. SFG has modest financial and operating leverage with very strong interest coverage and a generally conservative investment philosophy, which is augmented by its product and macro hedging programs.
Offsetting these positive rating factors include Minnesota Life operating within the highly competitive U.S. life and annuity market and the corresponding challenges associated with maintaining sustainable and profitable growth. While Minnesota Life has enjoyed strong growth in group insurance in recent years, it will need to broaden its product line and adapt to the rapidly changing dynamics of the employee benefits marketplace. Additionally, while progress has been made in growing its non-equity sensitive business lines, SFG retains a large amount of earnings exposure, which is subject to equity market volatility, and separate account business lines that continues to comprise a significant portion of assets under management. Finally, SFG retains earnings exposure related to its non-insurance business lines.
The rating affirmations for Securian Casualty recognize its excellent stand-alone risk-adjusted capitalization and profitable earnings. In addition, A.M. Best considers Securian Casualty’s growing role and importance within the organization as it has enabled SFG to deliver a broad range of credit insurance product offerings and services to the financial institution market.
A.M. Best believes positive rating actions in the near term are unlikely. Factors that could lead to negative rating actions include a substantial contraction of its business profile, a material decline in operating performance and/or risk-adjusted capitalization relative to A.M. Best’s expectations.
The FSR of A- (Excellent) and ICRs of “a-” have been affirmed for the following subsidiaries of Securian Financial Group, Inc:
- American Modern Life Insurance Company
- Southern Pioneer Life Insurance Company
- Balboa Life Insurance Company
- Balboa Life Insurance Company of New York
- Cherokee National Life Insurance Company
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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