AM Best Assigns Credit Ratings to Talcott Life & Annuity Re, Ltd.

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Talcott Life & Annuity Re, Ltd. (TLAR) (Cayman Islands). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect TLAR’s 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).

TLAR’s risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), is at the strongest level across all measured confidence intervals, which reflects its robust capital position with excess to allow for unfavorable economic scenarios. The company maintains an optimized asset-liability management framework, demonstrating a tight duration matching gap between liabilities and invested assets.

The operating performance of TLAR is driven by strong GAAP-basis financial returns, which contributes approximately 25% of its parent company, Talcott Financial Group Ltd. (TFG), total operating earnings, or roughly $173 million. Net operating results on a statutory accounting basis have shown a limited track record with modest net losses following its initial block transaction; although results had trended favorably into profitability by late 2025. Recent investment returns fell slightly as the company shifted its assets into a new long-term strategy. This transition caused temporary losses, but ultimately pushed yearly net investment income to $1.031 billion.

TLAR focuses on a mix of products tied to interest rates. These include universal life policies, payout annuities and fixed deferred annuities. To support growth, TLAR is reinvesting some of that excess capital back into its business to fund new block and flow reinsurance deals.

TLAR leverages an appropriate ERM program, which is governed by a clear three lines of defense model across financial, insurance, operational and model risk fields. Governance and risk cultures are heavily integrated with TFG operations, utilizing a vast network of dedicated risk-focused committees with clear oversight responsibilities. Operational and legislative oversight is further reinforced by a dedicated offshore chief risk officer who directly manages regulatory reporting and ongoing interactions with the Cayman Islands Monetary Authority.

Effective January 2026, the organization systematic rollout of its business plan included converting into a Cayman Islands domiciled segregated portfolio company to allow for multi-territory risk assumption under variable financial reporting guidelines. TLAR is viewed as strategically important too and highly integrated within TFG.

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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