OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has removed from under review with developing implications and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “bbb+” of Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company (collectively referred to as Talcott Resolution Group (Talcott Resolution) (formally referred to as Hartford Life Group). Additionally, A.M. Best has removed from under review with developing implications and affirmed the Long-Term ICR of “bbb-” of Hartford Life, Inc. (HLI) (Delaware), along with its Long-Term Issue Credit Ratings (Long-Term IRs). Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company are domiciled in Windsor, CT. The outlooks assigned to these Credit Ratings (ratings) are stable. (See below for a detailed listing of the Long-Term IRs.)
The rating actions are in response to the recent close of the acquisition of Talcott Resolution by a group of investors led by Cornell Capital LLC, Atlas Merchant Capital LLC, TRB Advisors LP, Global Atlantic Financial Group Limited (Global Atlantic), Pine Brook and J. Safra Group. While Talcott Resolution is no longer affiliated with The Hartford Financial Services Group, Inc. (The Hartford), the Hartford has retained a 9.7% ownership interest in Talcott Resolution. The Hartford’s group benefits and mutual fund subsidiaries, previously under HLI in the organizational structure, were transferred to another subsidiary of The Hartford prior to close of the transaction.
The ratings reflect Talcott Resolution’s very strong balance sheet, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The group’s risk-adjusted capitalization remains at the strongest level, supportive of its current investment and insurance risks. Additionally, A.M. Best does not expect the moderately conservative investment allocation to change materially, reflecting a diverse portfolio of invested assets across industries, primarily in investment grade holdings. Investments will continue to be managed by HIMCO (Hartford Investment Management Company). Overall financial and operating leverage across the insurance entities remains modest at under 3%, with interest coverage well in excess of debt servicing needs. As part of the transaction, Talcott Resolution reinsured a material portion of its fixed annuity, payout annuity and structured settlement businesses to a subsidiary of Global Atlantic, materially increasing its reliance on reinsurance. However, counterparty risk is generally considered modest, due to the favorable credit ratings of Talcott Resolution’s key reinsurance partners.
Talcott Resolution’s business profile is viewed as limited due to the run-off nature of its operations as well as its lack of diversification of revenue and earnings streams. As such, operating metrics are trending downward, which is expected for a company that is managing run-off business. A.M. Best will continue to discuss the strategic direction of Talcott Resolution going forward, should the company decide to further diversify or alter its current strategy. Enterprise risk management is viewed favorably as the company works to further enhance its existing risk management capabilities. A.M. Best believes that Talcott Resolution’s current risk identification and mitigation strategies are appropriate and an adequate match to the level of risk attributed to its current business model.
Hartford Life, Inc.—
-- “bbb-” on $250 million 7.65% senior unsecured debentures, due 2027
(approximately $80 million outstanding)
-- “bbb-” on $400 million 7.375% senior unsecured notes, due 2031 (approximately $63 million outstanding)
Hartford Life Institutional Funding— “bbb+”on program rating
-- “bbb+” on all outstanding notes issued under the program
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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