A.M. Best Affirms Credit Ratings Of Wilton Re

June 24, 2018

A.M. Best has affirmed the Financial Strength Rating [FSR] of A+ [Superior] and the Long-Term Issuer Credit Ratings [Long-Term ICR] of “aa-” of Wilton Reinsurance Bermuda Limited [Bermuda] and its subsidiaries.

A.M. Best also has affirmed the Long-Term ICRs of “a-” of Wilton Re Ltd [Nova Scotia, Canada] and Wilton Re Finance, LLC [Wilton Re Finance] [Delaware], as well as the Long-Term Issue Credit Rating of “a-” on the $300 million 5.875% senior unsecured notes due 2033 of Wilton Re Finance. The notes are unconditionally guaranteed by its parent companies, Wilton Re U.S. Holdings, Inc. and Wilton Re Ltd. A.M. Best notes that Wilton Re Ltd’s adjusted financial leverage and interest coverage are within A.M. Best’s expectation.

Additionally, A.M. Best has upgraded the FSR to A+ [Superior] from A [Excellent] and the Long-Term ICR to “aa-” from “a” of ivari [Toronto, Ontario, Canada].This upgrade reflects A.M. Best’s view that ivari has become a strategic part of Wilton Re Ltd’s current and future business strategies, contributing a significant portion of the group’s earnings.

The outlook of all these Credit Ratings [ratings] is stable.

The ratings agency said, “The ratings reflect Wilton Re’s very strong balance sheet strength, as well as strong operating performance, favorable business profile and appropriate enterprise risk management.

“The ratings also reflect Wilton Re’s solid risk-adjusted capitalization level, disciplined growth strategy, and high quality balance sheet and stable liability structure, which are focused principally on mortality risk. The ratings also recognize the ongoing commitment by the company’s highly rated ultimate parent, Canada Pension Plan Investment Board [CPPIB], to provide capital to Wilton Re in support of future growth. While Wilton Re’s operations generate significant capital, which can be deployed to fund growth, A.M. Best believes that CPPIB would provide additional funding, if needed. Wilton Re’s continued strategy of closed block acquisitions is viewed positively, as it enhances the embedded value of the organization, and its future earnings and capital generation capabilities.

“Partially offsetting these positive rating attributes is the impact of the continued low interest rate environment, which has modestly affected earnings on fixed income investments. Operating results trends also have been dampened recently by adverse mortality trends for the industry and a recent deferred acquisition cost unlocking. Other offsetting rating factors include potential execution risks and competition associated with acquiring larger blocks of business.”

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