OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa+” (Superior) of Berkshire Hathaway Life Insurance Company of Nebraska (BHLN). AM Best also has affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa-” (Superior) of First Berkshire Hathaway Life Insurance Company (New York, NY). The outlooks of these Credit Ratings (ratings) are stable.
The ratings of BHLN reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The ratings of First Berkshire Hathaway Life Insurance Company reflect its balance sheet strength, which AM Best assesses as strongest, as well as its marginal operating performance, limited business profile and appropriate ERM. Both BHLN and First Berkshire Hathaway Life Insurance Company receive substantial financial, operational and other resource support from their parent company, National Indemnity Company.
Despite a slight decline in capital for year-end 2020, BHLN has a very strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and benefits from an ongoing flow of reinsurance transactions. Partially offsetting BHLN’s favorable balance sheet strength assessment are fluctuating statutory operating trends, driven by the deal flow and mortality results on certain blocks, as well as exposure to interest-sensitive structured settlement business.
First Berkshire Hathaway Life Insurance Company also experienced a slight decline in capital for year-end 2020. However, the company maintained favorable risk-adjusted capitalization, which fell within the strongest category, driven by an extremely liquid asset portfolio that is heavily invested in cash and short-term investments. Partially offsetting the favorable balance sheet strength assessment are the fluctuating operating results and limited product and geographic diversification. It is noted by AM Best that both entities serve a specific purpose within the greater Berkshire Hathaway organization and hence most of these unfavorable factors are part of the overall strategy and actively monitored by senior management.
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