Rating agency AM Best has upgraded the Financial Strength Rating (FSR) to A+ (Superior) from A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “aa-” (Superior) from “a+” (Excellent) of the members of Athene Group (Athene), and has assigned a stable outlook to the ratings.
As noted by the agency, Athene is the consolidation of the organisation’s U.S. operating companies, along with its affiliated reinsurance companies domiciled in Bermuda.
At the same time, AM Best has also upgraded the Long-Term ICR to “a-” (Excellent) from “bbb+” (Good) of Athene Holding Ltd. (Delaware).
Athene Holding Ltd. operates as the holding company for the U.S. and Bermuda operations.
Concurrently, the agency has also upgraded the Long-Term Issue Credit Ratings (Long-Term IRs) and the indicative Long-Term IRs of Athene Holding Ltd. (Delaware).
The ratings reflect Athene’s balance sheet strength, which AM Best assesses as very strong, and also its strong operating performance, favorable business profile and appropriate enterprise risk management.
The agency noted that the rating upgrades reflect a continuing trend of Athene’s improving balance sheet strength, and that it views Athene’s consolidated risk-adjusted capitalization as strongest, as measured by Best’s Capital Adequacy Ratio (BCAR).
Moreover, AM Best explained that financial leverage metrics also support Athene’s current ratings.
The agency notes that Athene holds elevated allocations to less-liquid investments, which could be impacted materially under adverse market conditions, though default in its investment portfolio has been low to date.
“Athene has a track record of consistently positive earnings driven by favorable earning spreads and operating profitability, despite the challenges related to competitive pressures,” says AM Best.
Further, the agency states that Athene’s favorable business profile reflects continued enhancements through additional distribution channels in its retail markets, as well as expansion of its pension risk transfer (PRT) business in the United States, as well as its increased issuances of funding agreements and wider use of its flow reinsurance channel in Japan in recent years.
