AM Best Upgrades Issuer Credit Ratings of Nassau Financial Group, L.P. Operating Insurance Subsidiaries

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to “bbb+” (Good) from “bbb” (Good) and affirmed the Financial Strength Rating (FSR) of B++ (Good) of Nassau Life Insurance Company, Nassau Life and Annuity Company and Nassau Life Insurance Company of Kansas. These companies are collectively referred to as the Nassau Insurance Group (Nassau). In addition, AM Best has upgraded the Long-Term ICR to “bb+” (Fair) from “bb” (Fair) of The Nassau Companies of New York, Inc., along with the organization’s Long-Term Issue Credit Ratings (Long-Term IRs). Concurrently, AM Best has revised the outlooks of the Long-Term ICRs to stable from positive while the outlook of the FSR is stable. (See below for a listing of the Long-Term IRs.) All companies are headquartered in Hartford, CT, unless otherwise specified.

The Credit Ratings (ratings) reflect Nassau’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The upgrading of Nassau’s Long-Term ICRs is due to the group’s improved operating performance metrics over the past several years. Operating performance results have been bolstered more recently by a significant improvement in alternative investment income and driven by insurance and asset management results with effective prudent expense management. There also has been continued earnings diversification between the insurance and fee-based businesses. Nassau has experienced strong premium growth in recent years following prior declines due to a strategic decision to manage new growth while developing a suite of new product offerings, as well as the continued runoff of legacy blocks of business. In addition, there is a concentration of new sales in interest-sensitive annuity products, albeit with good geographic diversification on a national basis.

Nassau’s Long-Term ICR upgrades also reflect the group’s ability to accomplish its near-term strategic goals strategy and increase scale. Nassau has built a diversified annuity business with a loyal producer base that continues to deliver above-market sales growth and returns. The holding company has successfully raised additional capital for necessary growth despite facing some industry-wide challenges, including increased mortality, surrenders and market volatility. The company’s ERM has also improved, supporting its growth objectives and improving scale amid increased competition in the annuity space. AM Best will continue to monitor the progress of Nassau to make sure that it can sustain its measured growth while maintaining appropriate capital going forward.

The following Long-Term IRs have been upgraded, with the outlooks revised to stable from positive:

The Nassau Companies of New York, Inc.—
-- to “bb+” (Fair) from “bb” (Fair) on $300 million, 7.45% senior unsecured notes, due 2032

Nassau Life Insurance Company—
-- to “bbb-” (Good) from “bb+” (Fair) on $175 million, 7.15% surplus notes, due 2034

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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