AM Best Affirms Credit Ratings of Teachers Insurance and Annuity Association of America

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A++ (Superior) and the Long-Term Issuer Credit Ratings of “aaa” (Exceptional) of Teachers Insurance and Annuity Association of America (TIAA) (New York, NY). In addition, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IRs) of “aa” (Superior). (Please see complete listing of Long-Term IRs below). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect TIAA’s balance sheet strength, which AM Best assesses as strongest, as well as its very strong operating performance, very favorable business profile and very strong enterprise risk management.

The ratings reflect TIAA’s continued market-leading position in the higher education and not-for-profit pension marketplaces. TIAA enjoys significant economies of scale as one of the largest retirement systems in the United States, with assets under management and administration of approximately $1.8 trillion at year-end 2025. The ratings also reflect TIAA Group’s risk-adjusted capitalization at the very strong level, as measured by Best's Capital Adequacy Ratio (BCAR). TIAA has significant statutory accounting flexibility to manage its risk-adjusted capital position, including the ability to adjust crediting rates on its large in-force block of general account retirement annuities. AM Best will continue to watch TIAA’s capital levels, which have remained relatively flat over the last few years.

Also noted is the company’s very stable liability structure for a significant portion of its reserves. AM Best views favorably TIAA’s unique long insurance liability structure with low liquidity needs, whereby nearly three-quarters of its general account reserves are not cashable and can only be received as a death benefit, an IRS-required minimum distribution or in the form of a periodic annuity payout.

AM Best views the company’s operating performance as very strong due to solid growth and significant policyholder dividends. Offsetting this are significant realized investment losses in recent years with some continued concern regarding the group’s sizeable increased exposure to real estate assets, including commercial mortgage holdings and an elevated level of Schedule BA assets. TIAA’s mortgage loan portfolio has generally performed historically well, but delinquencies, foreclosures and restructures have continued to increase.

Additionally, TIAA’s Nuveen LLC is expected to provide continued additional earnings diversification and add additional scale to TIAA’s business profile going forward. This includes TIAA’s announcement in the first quarter of 2026 that Nuveen, a TIAA Company, has entered into a cash acquisition of Schroders plc (Schroders). Schroders is a leading provider in active asset management, advisory and wealth management services with $1.1 trillion in assets under management. Once the acquisition is completed, the combined Nuveen organization will become a top 10 global asset manager with almost $2.5 trillion in assets under management. The transaction is also expected to increase leverage at TIAA due to purchase financing. In addition, the transaction will increase scale and diversification for the organization as it expands its less capital-intensive asset management business globally.

The following Long-Term IRs have been affirmed with a stable outlooks:

Teachers Insurance and Annuity Association of America—
- “aa” (Superior) on $1.05 billion 6.85% surplus notes due Dec. 16, 2039
- “aa” (Superior) on $1.65 billion 4.90% surplus notes due Sept. 15, 2044
- “aa” (Superior) on $2 billion 4.27% surplus notes due May 15, 2047
- “aa” (Superior) on $1.25 billion 3.3% surplus notes due March 15, 2050
- “aa” (Superior) on $2 billion 6.05% surplus notes due June 15, 2056

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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