AM Best Affirms Credit Ratings of Global Atlantic Financial Group Limited and Its Subsidiaries

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of Commonwealth Annuity and Life Insurance Company (Brighton, MA), First Allmerica Financial Life Insurance Company (Brighton, MA), Forethought Life Insurance Company (Indianapolis, IN), Accordia Life and Annuity Company (Des Moines, IA), and its affiliates, Global Atlantic Re Limited (Bermuda) and Global Atlantic Assurance Limited (Bermuda). These subsidiaries are referred to collectively as Global Atlantic Group (Global Atlantic). AM Best also has affirmed the Long-Term ICR of bbb+” (Good) of Global Atlantic Financial Group Limited (Bermuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Global Atlantic’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The rating affirmations reflect Global Atlantic’s supportive balance sheet strength metrics. The balance sheet strength metrics are driven by risk-adjusted capitalization that AM Best assesses at the strong level, as measured by Best’s Capital Adequacy Ratio (BCAR), ample liquidity and strong financial flexibility. The investment portfolio is composed primarily of fixed income instruments including corporate bonds, mortgage loans, structured securities and government securities. AM Best notes continued investment into alternative securities including private credit. Global Atlantic has experienced double-digit growth in the group’s invested assets over the past five years. The main drivers in this growth include an increase in direct business written in the group’s individual markets, and large block reinsurance transactions. The block transactions introduce some volatility in net premium growth, but the five-year trend is generally positive.

The group’s operating performance is adequate to reflect recent statutory strain and premium growth. Underwriting losses continue to be offset largely by investment income. New money yields and investments in alternative assets have produced record-high yields for the portfolio. Overall earnings have been lower over the recent three-year period, particularly on a statutory basis. Premium growth is expected to remain strong with support from robust distribution channels in the individual and institutional business segments.

The group’s favorable business profile has grown in the annuity and preneed markets. Global Atlantic has a strong market presence and is a top writer in both the individual annuity and preneed space. Global Atlantic also has expanded its presence in the reinsurance space domestically and internationally. The group utilizes several different structures and treaties to provide reinsurance solutions that strengthen relationships with its clients. Global Atlantic continues to utilize its sidecars, Ivy I, Ivy II, and Ivy III as co-investment vehicles. These sidecars help Global Atlantic in providing solutions to its reinsurance clients and provide co-investors with more investment opportunities.

The group’s ERM program has continued to grow and adapt, meeting the needs of the group and the larger organization. AM Best expects continued program expansion with support from KKR & Co. Inc.’s capabilities.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.