OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has commented that the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of Farmers New World Life Insurance Company (FNWL) (Mercer Island, WA), a subsidiary of Zurich Insurance Group Ltd (Zurich), will remain unchanged following its recent announcement that it has executed a reinsurance transaction for its closed annuity liabilities with Reinsurance Group of America, Incorporated. The outlook of these Credit Ratings (ratings) remains stable.
The transaction primarily has been structured as a coinsurance transaction of its closed annuity blocks, representing covered liabilities of approximately $2.3 billion. While the transaction is sizeable, A.M. Best does not expect it to result in a significant change to FNWL’s operating profile, business profile or risk-adjusted capitalization level; however, the transaction likely will reduce overall required capital at FNWL. The transaction is being executed as part of Zurich’s overall strategy to reduce interest rate tail risk, deploy capital effectively and improve operating profitability at the consolidated level.
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