AM Best Affirms Athene’s Credit Ratings

April 24, 2022

AM Best has affirmed the Financial Strength Rating [FSR] of A [Excellent] and the Long-Term Issuer Credit Ratings [Long-Term ICRs] of “a+” [Excellent] of the members of Athene Group.

A statement from the rating agency said, “Athene, which is focused on the pension group annuity, funding agreement, fixed indexed and fixed annuity market segments, is the consolidation of the organization’s U.S. operating companies, along with its affiliated reinsurance companies domiciled in Bermuda.

“Additionally, AM Best has affirmed the Long-Term ICR of “bbb+” [Good], the existing Long-Term Issue Credit Ratings [Long-Term IRs] and the indicative Long-Term IRs of Athene Holding Ltd. [Bermuda]. Athene Holding Ltd. operates as the holding company for the U.S. and Bermuda operations. The outlook of these Credit Ratings [ratings] is stable. [See below for a detailed listing of the companies and ratings.]

“Concurrently, AM Best has assigned an FSR of A [Excellent] and the Long-Term ICR of “a+” [Excellent] to Athene Annuity Re Ltd. [Bermuda]. The outlook assigned to this rating is stable.

A statement from the rating agency said, “The 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, Federal Home Loan Bank borrowing capacity, and a shelf registration statement, as well as uncalled capital commitments from Athene Co-Invest Reinsurance Affiliates [ACRA] investors. The completed merger with Apollo Global Management, Inc. is expected to increase Athene’s financial flexibility.

“Financial leverage metrics have improved in the past year as capital growth has outstripped debt issuances. 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 track record of strong earnings driven by 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, its increased issuances of funding agreements 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 have been accretive to earnings.”

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