AM Best Affirms Global Atlantic Ratings
Rating Company A.M. Best has affirmed the financial strength rating [FSR] of A- [Excellent] and the issuer credit ratings [ICR] of “a-” of the life insurance subsidiaries of Global Atlantic Financial Group Limited [Global Atlantic] [Hamilton, Bermuda].
Concurrently, A.M. Best has affirmed the ICR of “bbb-”and the debt rating on $150 million 8.625% senior unsecured notes due 2021 of Forethought Financial Group, Inc. The outlook for all ratings is stable.
A statement from the ratings company said, “The rating affirmations reflect Global Atlantic’s solid consolidated risk-adjusted capitalization, strong GAAP operating earnings and significant growth through recent acquisitions. It also reflects the group’s more diverse business mix comprised of reinsurance, direct individual life and direct annuity lines of business.
“The recent acquisitions of Forethought Life Insurance Company and Accordia Life and Annuity Company provide Global Atlantic with new sources of earnings diversification as well as access to new product lines, distribution channels, and senior management with industry expertise. A.M. Best expects premiums to continue to grow through these direct channels as the company focuses on core product lines.
“Offsetting rating factors include the need for Global Atlantic to establish a longer term operational and financial performance trend line for its larger more recent acquisitions, elevated, although declining, exposure to structured securities within its fixed-income portfolio, and an increased competitive environment. Additionally, while it has acquired mature distribution platforms, Global Atlantic’s direct business plan is viewed as fairly new under its current ownership structure A.M. Best will continue to monitor the effects of the recent transactions on the organization’s earnings, top line growth and capital adequacy.
“Factors that may lead to future positive rating actions include sustained favorable operating results across business lines, continued favorable integration of recent acquisitions, organic premium growth and maintenance of strong levels of risk-adjusted capital. Negative rating actions could occur if capitalization, operating performance, or both fall markedly short of A.M. Best’s expectations.”
