OLDWICK, N.J.–(BUSINESS WIRE)–AM Greatest has affirmed the Monetary Power Ranking (FSR) of B+ (Good) and the Lengthy-Time period Difficulty Credit score Rankings (Lengthy-Time period ICR) of “bbb-” of Nassau Life Insurance coverage Firm (NNY), Nassau Life and Annuity Firm (NLA), Nassau Life Insurance coverage Firm of Kansas (Overland Park, KS) and Nassau Life Insurance coverage Firm of Texas (Austin, TX). The entire aforementioned entities, together with an unrated entity, Nassau Re (Cayman) Ltd., which is used for inner reinsurance, are collectively known as the Nassau Insurance coverage Group (Nassau). Concurrently, AM Greatest has affirmed the FSR of B (Honest) and the Lengthy-Time period ICR of “bb” of PHL Variable Insurance coverage Firm (PHL).
As well as, AM Greatest has affirmed the Lengthy-Time period ICR of “b+” of The Nassau Firms of New York, Inc., together with its present Lengthy-Time period Difficulty Credit score Rankings (Lengthy-Time period IRs). All corporations are headquartered in Hartford, CT, until in any other case specified.
The outlook of all of those Credit score Rankings (rankings) is unfavorable. (See under for an in depth itemizing of the Lengthy-Time period IRs.)
The rankings of Nassau replicate its statutory stability sheet energy, which AM Greatest categorizes as ample, in addition to its marginal working efficiency, impartial enterprise profile and acceptable enterprise danger administration (ERM).
The unfavorable outlook displays the appreciable working losses at PHL Variable and the utilization of extra capital for the latest acquisition of Foresters Monetary Holding Firm, Inc. and Foresters Life Insurance coverage and Annuity Firm (FLIAC); every acquired from The Impartial Order of Foresters and merged into NNY, which collectively have negatively impacted the capitalization and monetary flexibility of its father or mother, Nassau Monetary Group, L.P. (NFG). As well as, statutory working outcomes have trended downward at NNY as a result of elevated mortality in its legacy life insurance coverage enterprise and a lower in funding earnings as a result of a declining invested asset base, in addition to funding yields which have been pressured by the low rate of interest atmosphere. AM Greatest notes that NNY has reported statutory internet working losses by the third quarter of 2020 as a result of affect from the Covid-19 pandemic, together with larger mortality and a few volatility inside its different funding portfolio, in addition to non-recurring bills over the past two years.
Statutory internet earnings at NFG has been trending negatively lately as a result of ongoing antagonistic mortality in its legacy life companies, portfolio yield compression, capital losses and non- recurring bills. Nonetheless, earnings and revenues have benefited from progress in fastened annuity gross sales and a modest quantity of earnings associated to its asset administration and distribution segments. AM Greatest expects NFG’s earnings to development positively as soon as value of insurance coverage will increase are carried out inside its legacy life block. Earnings also needs to profit from diminished bills, an anticipated enchancment in general mortality at NNY and extra earnings from its acquisition of FLIAC over the close to to medium-term.
Administration has made important progress lately streamlining operations, rebranding beneath the Nassau identify, remediating a big quantity of fabric weaknesses that existed previous to its acquisition of the group and strengthening its ERM framework and capabilities.
As well as, the extremely risky enterprise inside PHL Variable has been ceded to a wholly-owned captive subsidiary that reinsures the overall retained danger in PHL. Regardless of the reinsurance settlement, NFG and its subsidiaries could possibly be negatively impacted if the captive entity doesn’t carry out as anticipated.
AM Greatest has withdrawn the rankings of PHL Variable as the corporate has requested to not take part within the AM Greatest interactive ranking course of.
The next Lengthy-Time period IRs have been affirmed with a unfavorable outlook:
The Nassau Firms of New York, Inc.—
— “b+” on $300 million 7.45% senior unsecured notes, due 2032 (roughly $253 million excellent)
Nassau Life Insurance coverage Firm—
— “bb-” on $175 million 7.15% surplus notes, due 2034 (roughly $126 million excellent)
This press launch pertains to Credit score Rankings which have been printed on AM Greatest’s web site. For all ranking info regarding the discharge and pertinent disclosures, together with particulars of the workplace accountable for issuing every of the person rankings referenced on this launch, please see AM Greatest’s Recent Rating Activity internet web page. For added info concerning the use and limitations of Credit score Ranking opinions, please view Guide to Best’s Credit Ratings. For info on the right media use of Greatest’s Credit score Rankings and AM Greatest press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Greatest is a world credit standing company, information writer and information analytics supplier specializing within the insurance coverage business. Headquartered in the US, the corporate does enterprise in over 100 nations with regional workplaces in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico Metropolis. For extra info, go to www.ambest.com.
Copyright © 2020 by A.M. Greatest Ranking Companies, Inc. and/or its associates. ALL RIGHTS RESERVED.