Best’s News & Research Service - March 29, 2017 03:29 PM (EDT)
A.M. Best Removes From Under Review and Affirms Credit Ratings of Fidelity & Guaranty Life Holdings and Its Key Subsidiaries
- March 29, 2017 03:29 PM (EDT)
Oldwick //BestWire// - A.M. Best has removed from under review with developing implications and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “bbb+” of the key life/health subsidiaries of Fidelity & Guaranty Life Holdings, Inc. (FGL) (Delaware). Concurrently, A.M. Best has removed from under review with developing implications and affirmed the Long-Term ICR and existing senior Long-Term Issue Credit Rating (Long-Term IR) of “bb+” of FGL. The outlook assigned to all Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings.)
In November 2015, FGL announced that it had entered into an agreement to be acquired by Beijing, China-based Anbang Insurance Group Co., Ltd. (Anbang). After more than one year since the initial announcement, the transaction is still pending and FGL remains under the ownership of HRG Group, Inc. During this time, A.M. Best has engaged in numerous discussions with company management regarding the expected financial and strategic implications of the pending acquisition. A.M. Best’s decision to remove the ratings from under review is reflective of its view that the ratings of FGL and its subsidiaries are unlikely to be directly affected by the acquisition over the near-term, should the transaction be consummated. Nevertheless, A.M. Best will continue to closely monitor the developments of the pending transaction as new information becomes available.
The affirmation of the ratings of the key subsidiaries of FGL reflects the companies’ continued adequate risk-adjusted capitalization and financial flexibility, improved sales trends, generally positive earnings performance and enhanced competitive position in the fixed indexed annuity (FIA) market. Partially offsetting these positive rating factors are the increased risk profile of the investment portfolio, its recent history of realized investment losses, its significant reliance on FIA sales and increased competition from new market entrants into the FIA market.
The FSR of B++ (Good) and the Long-Term ICRs of “bbb+” have been removed from under review with developing implications, affirmed and assigned a stable outlook for the following key life/health subsidiaries of Fidelity & Guaranty Life Holdings, Inc.
- Fidelity & Guaranty Life Insurance Company
- Fidelity & Guaranty Life Insurance Company of New York
The following Long-Term IR has been removed from under review with developing implications, affirmed and assigned a stable outlook:
— “bb+” on $300 million 6.375% senior unsecured notes, due 2021
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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