AM Best Comments on Credit Ratings of Allianz Life Insurance Company of North America and Its Subsidiary Following Reinsurance Announcement
OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has commented that the Credit Ratings (ratings) of Allianz Life Insurance Company of North America (Allianz Life) (Minneapolis, MN) and its wholly owned subsidiary, Allianz Life Insurance Company of New York (Allianz New York), remain unchanged following the Dec. 3, 2021, announcement that it has entered into an agreement to reinsure a $35 billion fixed index annuity (FIA) portfolio with Talcott Resolution Life Insurance Company (Talcott Resolution) and Resolution Life. Allianz SE (Allianz) (Germany) is the ultimate parent of Allianz Life and Allianz New York.
The reinsurance arrangement includes 100% quota share reinsurance for a closed FIA book and a 50% quota share for an open FIA book. The reinsurance agreement also includes collateral and multiple layers of protection. Allianz Global Investors and Pacific Investment Management Company, LLC (PIMCO) will remain the primary asset managers of the reinsured business, while Allianz Life will continue to manage administration of the policies and provide support to Allianz Life’s U.S. policyholders.
The transaction is in line with Allianz Life’s strategy to unlock value in its life insurance business, manage capital on its balance sheet and increase synergies with its asset management business. AM Best believes that Allianz Life’s reinsurance agreement with the named counterparties is a net positive. The agreement will unlock $4.1 billion in value and free up regulatory capital for Allianz. Upon closing, the transaction is expected to improve Allianz Life’s return on equity by about 6 percentage points to approximately 18% on a proforma basis as of Sept. 30, 2021.
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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.