AM Best Upgrades Athene Issuer Credit Ratings
AM Best has upgraded the Long-Term Issuer Credit Rating to “bbb+” from “bbb”, the existing Long-Term Issue Credit Ratings and the indicative Long-Term IRs of Athene Holding Ltd.
Concurrently, AM Best has upgraded the Long-Term ICRs to “a+” from “a” and affirmed the Financial Strength Rating [FSR] of A [Excellent] of its insurance subsidiaries. The outlook of the Long-Term ICRs has been revised to stable from positive, while the outlook of the FSR is stable.
The ratings agency said, “The Credit Ratings [ratings] reflect Athene’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.
“AM Best views Athene’s consolidated risk-adjusted capitalization as strongest, as measured by Best’s Capital Adequacy Ratio [BCAR], and supported by favorable financial flexibility. Athene has demonstrated its ability to access capital markets and maintains additional access to capital and liquidity through a revolving credit facility and Federal Home Loan Bank borrowing capacity, as well as uncalled capital commitments from Athene Co-Invest Reinsurance Affiliates [ACRA] investors.
“Financial leverage metrics have increased with recent senior unsecured notes and preferred equity issuances, but still remain within guidelines for the current ratings. However, AM Best notes that Athene holds elevated allocations to more complex and less-liquid investments, which could be impacted materially under adverse market conditions.
“Athene has a trend of strong earnings driven by sustained favorable earning spreads and operating profitability, despite the challenges related to the persistent low interest rate environment and high competitive pressures.
“Athene’s favorable business profile reflects continued enhancements through additional distribution channels in its retail markets, and expansion of its pension risk transfer business in the United States and United Kingdom, and of its flow reinsurance channel in Japan in recent years. Furthermore, ACRA and the recent fixed annuity reinsurance agreement with Jackson National Life Insurance Company are projected to be accretive to earnings.”
