Progressive, Principal Financial and 13 Others See Ratings Updates
Old Republic's debt effects ratings action; AXA, Cigna Europe, HealthSpring and TIAA also receive updates.
Insurance Networking Ratings Corner, February 7, 2012
A.M. Best, Fitch Ratings, Moody’s Investors Service and Standard & Poor’s (S&P’s) released ratings updates. The following are some of the most recent:
American Equity Investment Life Holding Co. and its subsidiaries
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A.M. Best has affirmed the financial strength rating of A- (Excellent) and issuer credit ratings (ICR) of “a-” of American Equity Investment Life Insurance Co. (American Equity Life) and its subsidiaries, American Equity Investment Life Insurance Co. of New York and Eagle Life Insurance Co. (Eagle Life).
Concurrently, A.M. Best has affirmed the ICR of “bbb-” and all debt ratings of American Equity Life’s parent, American Equity Investment Life Holding Co. (AEL), as well as the indicative ratings under the shelf registration of American Equity Capital Trust V and VI. The outlook for all ratings is stable.
The ratings recognize American Equity’s leading role in the fixed-indexed annuity marketplace, strong risk-adjusted capitalization, continued positive trends of statutory and GAAP operating earnings, and strong surrender protection charges to mitigate potential disintermediation risk. In addition, A.M. Best views the financial leverage and interest coverage ratios of AEL within the guidelines for its current ratings.
S&P affirmed its 'AA-' financial strength and long-term counterparty ratings on AXA Life Insurance Co. Ltd., and removed the ratings from CreditWatch with negative implications. The outlook on the financial strength and long-term counterparty ratings is negative. AXA Life Insurance is a Japanese subsidiary
of the France-based AXA group, one of the world's largest insurance and financial groups. S&P considers AXA Life Insurance as a core subsidiary within the AXA group, under its group methodology for insurance companies.
S&P’s rating affirmations on the AXA group are based on the opinion that any potential negative effects from the ratings agency’s recent downgrades of some sovereign issuers in the eurozone, as well as the current investment market conditions on the group's credit quality, are within the assumptions for the current ratings. Although market developments in the second half of 2011 have weakened the AXA group's risk-adjusted capital adequacy, S&P expects that its revenue and earnings diversification, management actions, and risk-management abilities will help strengthen capital adequacy in 2012 and 2013.
Therefore, S&P affirmed the 'A' long-term counterparty credit ratings on holding companies AXA S.A. and AXA Financial Inc., and the 'AA-' ratings on the core subsidiaries of the AXA group – except for AXA Life Insurance – on Jan. 27, 2012, and removed them from CreditWatch with negative implications. S&P had placed the ratings on CreditWatch negative on Dec. 9, 2011 (Dec. 12, 2011, for AXA Life Insurance), following the negative CreditWatch placement of eurozone sovereign ratings on Dec. 5, 2011.
Cigna Life Insurance Co. of Europe SA-N.V.
A.M. Best Europe has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and the issuer credit rating to “a” from “a-” of Cigna Life Insurance Co. of Europe SA-N.V. (CLICE). The outlook for both ratings remains stable.
The ratings reflect the implicit support CLICE receives from its ultimate parent company, Cigna Corp. (Cigna), along with its excellent level of risk-adjusted capitalization, strengthening business profile and sound prospective underwriting performance. The upgrades reflect CLICE’s improving business profile.
CLICE is expected to benefit from the Cigna group’s acquisitions of Vanbreda International NV (Vanbreda) and FirstAssist Insurance Services Ltd., which have taken place during the last 18 months. Along with additional premium income of around EUR 350 million ($450 million) during 2012, CLICE also is expected to receive capital injections through 2013 from the Cigna group, approaching EUR 90 million ($120 million), in order to service the new business and maintain an excellent level of risk-adjusted capitalization, EUR 50 million ($66 million), which already has been received.
Fitch has upgraded the ratings assigned to CNO Financial Group Inc. (CNO Financial) and its core insurance subsidiaries. The ratings on CNO Financial's senior secured debt issue and Conseco Life Insurance Co. remain unchanged. The rating outlook is stable. The rating action reflects CNO Financial's improved capital position, earnings profile and financial flexibility.
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