OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlook to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “bbb+” of Knighthead Annuity & Life Insurance Company (Knighthead) (Cayman Islands).
The ratings reflect Knighthead’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The positive outlook reflects the continued maturity and diversification of Knighthead’s business profile through expanded product offerings, distribution partners and the addition of a reinsurance assumption strategy. Risk-adjusted capitalization continues to be assessed as strongest, but is expected to decline as the company deploys capital into new business. Operating performance continues to improve due to strong premium growth and favorable investment margins. A.M. Best views the long/short investment strategy on its core annuity products as higher risk due to the inherent volatility and its impact on earnings and equity; however, the more traditional investment strategy implemented on its growing reinsurance assets is expected to reduce volatility. A.M. Best also notes that there is no financial or operating leverage at the insurance company or the holding company, Knighthead Holdings, Ltd.
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