OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to positive from stable for the Long-Term Issuer Credit Ratings (Long-Term ICR) and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term ICRs of “a” of the members of Athene Group (Athene). The outlook of the FSR remains stable. Athene, which is focused on the fixed indexed and fixed annuity market segments, is the consolidation of the organization’s U.S. operating companies, along with Athene Life Re Ltd. (Bermuda), its affiliated reinsurance company. Additionally, AM Best has revised the outlooks to positive from stable and affirmed the Long-Term ICR of “bbb”, the existing Long-Term Issue Credit Rating (Long-Term IR) and the indicative Long-Term IRs of Athene Holding Ltd. (AHL) (Bermuda). AHL operates as the holding company for the U.S. and Bermuda operations. (See below for a detailed listing of Athene’s rated members and AHL’s Long-Term IRs.)
The ratings of Athene reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The positive outlooks reflect a consistently improving business profile, which AM Best currently characterizes as neutral. AM Best also notes Athene’s solid risk-adjusted capitalization levels, as measured by Best’s Capital Adequacy Ratio (BCAR), which are at the strongest level. This is supported by relatively low financial leverage at the holding company and solid liquidity. Athene also recently announced its new Athene Co-Invest Reinsurance Affiliate (ACRA), which will be a vehicle to raise funds for on-demand third party equity capital, and will work like a sidecar for Athene. Partially offsetting these strengths is the company’s investment portfolio, which includes structured securities and alternative assets and is viewed as more aggressive compared with traditional life insurance companies.
The company’s strong trend of earnings and organic capital growth has enabled AHL and its operating companies to strengthen their balance sheets while providing sufficient capital support for growth. Athene has demonstrated a consistent trend of strong profitability and sales growth. This includes recent pension risk transfer growth, solid fixed indexed annuity sales, and continued block reinsurance transactions, including the recent agreement with Lincoln Financial Group.
Athene maintains its position among the leaders in the fixed indexed annuity market. AM Best also notes the challenges the company faces in managing risks associated with its large retail distribution platform and continued rapid growth. Also noted are the pressures associated with managing assets in support of spread-based liabilities, given the extended low interest rate environment.
The FSR of A (Excellent) has been affirmed with a stable outlook and the Long-Term ICRs at “a” have been affirmed with the outlooks revised to positive from stable for the following members of Athene Group:
- Athene Annuity & Life Assurance Company
- Athene Annuity & Life Assurance Company of New York
- Athene Annuity and Life Company
- Athene Life Insurance Company of New York
- Athene Life Re Ltd.
The following Long-Term IR has been affirmed with the outlook revised to positive from stable:
Athene Holding Ltd. —
--“bbb” on $1.0 billion 4.125% senior unsecured notes, due 2028
The following indicative Long-Term IRs have been affirmed with the outlook revised to positive from stable:
Athene Holding Ltd. —
-- “bbb” on senior unsecured debt
-- “bbb-” on subordinated debt
-- “bb+” on junior subordinated debt
-- “bb+” on preferred stock
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