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FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 21, 2014 12:07 PM (EST)
A.M. Best has affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit ratings (ICR) of "a-" of the life insurance subsidiaries of Global Atlantic Financial Group Limited (Global Atlantic) (Hamilton, Bermuda). Concurrently, A.M. Best has affirmed the ICR of "bbb-"and the debt rating on $150 million 8.625% senior unsecured notes due 2021 of Forethought Financial Group, Inc. The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.)
The rating affirmations reflect Global Atlantic's solid consolidated risk-adjusted capitalization, strong GAAP operating earnings and significant growth through recent acquisitions. It also reflects the group's more diverse business mix comprised of reinsurance, direct individual life and direct annuity lines of business. The recent acquisitions of Forethought Life Insurance Company and Accordia Life and Annuity Company provide Global Atlantic with new sources of earnings diversification as well as access to new product lines, distribution channels, and senior management with industry expertise. A.M. Best expects premiums to continue to grow through these direct channels as the company focuses on core product lines.
Offsetting rating factors include the need for Global Atlantic to establish a longer term operational and financial performance trend line for its larger more recent acquisitions, elevated, although declining, exposure to structured securities within its fixed-income portfolio, and an increased competitive environment. Additionally, while it has acquired mature distribution platforms, Global Atlantic's direct business plan is viewed as fairly new under its current ownership structure A.M. Best will continue to monitor the effects of the recent transactions on the organization's earnings, top line growth and capital adequacy.
Factors that may lead to future positive rating actions include sustained favorable operating results across business lines, continued favorable integration of recent acquisitions, organic premium growth and maintenance of strong levels of risk-adjusted capital. Negative rating actions could occur if capitalization, operating performance, or both fall markedly short of A.M. Best's expectations.
The FSR of A- (Excellent) and the ICRs of "a-" have been affirmed with a stable outlook for the following life insurance subsidiaries of Global Atlantic Financial Group Limited:
The ICRs of "bbb-" has been affirmed with a stable outlook for Global Atlantic Financial Group Limited, Global Atlantic Financial Life Limited and Forethought Financial Group, Inc.
The following debt rating has been affirmed with a stable outlook:
Forethought Financial Group, Inc.—
— "bbb-" on $150 million 8.625% senior unsecured notes, due 2021
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.