Credit Rating Assigned To Global Atlantic Group
A.M. Best Co. has assigned an issuer credit rating [ICR] of “bbb-” to Global Atlantic Financial Group, which is headquartered in Bermuda. The outlook assigned is stable. The financial strength rating of A- [Excellent] and the ICRs of “a-” of the insurance operating entities of Global Atlantic are unchanged.
Global Atlantic is a financial services holding company seeking to acquire and grow businesses in the insurance and reinsurance marketplace. The company has a shareholder base of over 1,000 investors including The Goldman Sachs Group, Inc. Leveraging its strong risk and investment management expertise, Global Atlantic provides innovative solutions to its client franchise. Global Atlantic currently operates in the life and annuity and property/casualty segments.
A.M. Best said, “Global Atlantic’s ICR reflects its recent acquisition of AVIVA plc’s (AVIVA) U.S. life insurance business from Athene Holding Ltd. and the recent announcement that Global Atlantic has entered into a definitive agreement to acquire Forethought Financial Group, Inc. (FFGI) (Delaware) and its key subsidiary, Forethought Life Insurance Company (Indianapolis, IN). Both acquisitions will provide Global Atlantic with new sources of earnings diversification as well as enhance its product lines and distribution channels.
“Global Atlantic will remain challenged with respect to integrating and branding these large transactions. Additional offsetting rating factors include the company’s elevated, although declining, exposure to structured securities within its fixed income portfolio and the challenges relating to the continued low interest rate environment. Furthermore, Global Atlantic’s business plan is fairly new and remains untested.
“A.M. Best believes Global Atlantic will remain well positioned at its current rating level. Negative rating actions could occur if the company’s capitalization, operating performance or both fall markedly short of A.M. Best’s expectations. Negative rating actions also could occur should there be earnings pressure or a failure to successfully integrate current and future acquisitions.”
