AM Best Affirms Athene’s Credit Ratings
AM Best has affirmed the Financial Strength Rating of A+ [Superior] and the Long-Term Issuer Credit Ratings of “aa-” [Superior] of the members of Athene Group.
A statement from the rating agency said, “ Athene is the consolidation of the organization’s U.S. operating companies, along with its affiliated reinsurance companies domiciled in Bermuda. In addition, AM Best has affirmed the Long-Term ICR of “a-” [Excellent] of Athene Holding Ltd. [Delaware]. Athene Holding Ltd. operates as the holding company for the U.S. and Bermuda operations. Concurrently, AM Best has affirmed the Long-Term Issue Credit Ratings [Long-Term IR] and the indicative Long-Term IRs of Athene Holding Ltd. The outlook of all these Credit Ratings is stable.
“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], supported by favorable financial flexibility, including prudent excess liquidity. Athene has demonstrated its ability to access capital markets and maintains additional access to capital and liquidity through a liquidity facility, a revolving credit facility and the Federal Home Loan Bank, by its borrowing capacity and a shelf registration statement, as well as uncalled capital commitments from Athene Co-Invest Reinsurance Affiliates investors.
“Financial leverage metrics support Athene’s current ratings. AM Best notes that Athene holds elevated allocations to less-liquid investments, including increased allocations to Level III assets, which could be impacted materially under adverse market conditions, though defaults in its investment portfolio have been in line with industry averages.
“Athene has a track record of consistently positive earnings driven by favorable earning spreads and operating profitability, despite the challenges related to competitive pressures. This is bolstered by favorable net investment yields.
“In recent years, Athene’s favorable business profile reflects continued enhancements through favorable distribution channels in its retail markets, as well continued issuances of funding agreements and wider use of its reinsurance channel in Japan. Furthermore, AM Best notes that Athene has lessened its activity in the pension risk transfer marketplace in the last couple years, which is in line with the broader industry. Athene retains its market position as the number one overall seller of individual retail annuities.”
