A.M. Best Affirms Ratings Of Athene Holdings

April 21, 2018

A.M. Best has affirmed the Financial Strength Rating of A [Excellent] and the Long-Term Issuer Credit Rating [Long-Term ICR] of “a” of the members of Athene Group [Athene]. 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, A.M. Best has affirmed the Long-Term ICR of “bbb”, the existing Long-Term Issue Credit Ratings [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. The outlook of these ratings remains stable. [See below for a detailed listing of Athene’s members and AHL’s Long-Term IRs.]
A statement from the rating agency said, “The ratings of Athene reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management [ERM].

“Athene’s balance sheet strength is underpinned by its risk-adjusted capitalization that is at the strongest level, as measured by Best’s Capital Adequacy Ratio [BCAR]. This is also supported by relatively low financial leverage at the holding company and solid liquidity. Offsetting rating factors include 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 the announced acquisition of Voya Financial Inc.’s individual fixed and fixed indexed annuity business via reinsurance.

“Athene maintains its position among the leaders in the fixed indexed annuity market. A.M. Best also notes the challenges the company faces in managing risks associated with its expanded 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] and the Long-Term ICRs at “a” have been affirmed with a stable outlook 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 a stable outlook:

  • 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 a stable outlook:

  • 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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