A.M. Best Affirms Credit Ratings of Delphi Financial Group, Inc. and Its Subsidiaries
Concurrently,
The ratings of Reliance Standard reflect its strong level of risk-adjusted capitalization and favorable operating results, despite some spread compression within its interest sensitive annuity business and increased morbidity in its group long-term disability and stop loss insurance segments. Reliance Standard’s favorable operating results have been driven by generally steady loss ratios and good persistency in its core group insurance lines of business. Earnings also have been bolstered by a significant rise in investment income, which is attributable to a substantial increase in invested assets due to strong growth in its asset accumulation business. The ratings also consider Reliance Standard’s improved risk management capabilities, a reasonable level of financial leverage and strong interest coverage ratios at its intermediate holding company, DFG, and the strength and support of its ultimate parent, Tokio Marine.
Partially offsetting these positive rating factors is the general increase in higher risk and less liquid assets within its general account investment portfolio, including commercial mortgage loans, which currently represents approximately 200% of capital and surplus. While
The ratings of Safety National reflect its strong operating performance, established position as the leading provider in the excess workers’ compensation market and solid risk-adjusted capitalization. The ratings also take into account Safety National’s strategic role in the organization and the commitment from DFG and Tokio Marine to support ongoing operations.
Partially offsetting these positive rating factors is drag on overall operating performance from adverse underwriting results and the group’s somewhat constrained business profile with a significant majority of its premiums from workers’ compensation. Despite these concerns, the ratings recognize Safety National’s solid overall profitability and an expectation of continued generation of retained earnings.
The following Long-Term IRs have been affirmed:
-- “a-” on
-- “bbb” on
Reliance Standard Life Global Funding II— “aa-” program rating
-- “aa-” on all outstanding notes issued under the program
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. For information on the proper media use of Best’s Credit Ratings and
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