Fitch Ratings has affirmed the Insurer Financial Strength (IFS) ratings of
In a release on
USAA utilizes a relatively prudent investment strategy with virtually no exposure to below-investment-grade fixed income securities or direct sovereign exposure, and modest exposure to equities. However, USAA has sizeable exposure to structured securities, largely CMBS and ABS, comprising approximately 20 percent of its investment portfolio. This is somewhat mitigated by the high credit quality and seniority of the tranches.
Investments in illiquid subsidiaries represent approximately 40 percent of
Fitch continues to view the asset quality of USAA FSB favorably when compared to banking peers. Fitch views the bank's capitalization as adequate with a Tier 1 risk-based capital ratio of 12.9 percent as of
Fitch views the strategic category of
Key rating triggers that could lead to a downgrade include:
--A material deterioration in balance sheet strength, including net statutory leverage - defined as net written premiums and liabilities divided by surplus -above 2.0x for property/casualty operations and 2.7x excluding surplus for affiliated life insurance subsidiaries and
--Sharp and sustained weakening of underwriting results;
--TFC ratio at or above 0.4x;
--Significant growth in the banking operation would alter
Fitch has affirmed the following ratings with a Stable Outlook:
--IDR at 'AAA';
--Short-term IDR and commercial paper at 'F1+';
Primary insurance companies:
--IFS at 'AAA'.
Additional information is available at 'fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
--'Insurance Rating Methodology' (
Insurance Rating Methodology Amended
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