AM Best has upgraded the credit ratings for most of Talcott Resolution Life, Inc.’s subsidiaries, and given them a stable outlook.
The Financial Strength Rating (FSR) for Talcott Resolution Life Insurance Company and Talcott Resolution Life and Annuity Insurance Company was upgraded to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) to “a-” (Excellent) from “bbb+” (Good).
These companies are domiciled in Hartford, CT. Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Talcott Life Re, Ltd. (Bermuda). These companies are collectively referred to as Talcott Financial Group (TFG).
Additionally, the agency has affirmed the Long-Term ICR of “bbb-” (Good) of Talcott Resolution Life, Inc. (Delaware), along with its Long-Term Issue Credit Ratings (Long-Term IRs).
According to the announcement, these rating moves reflect TFG’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
TFG has established itself quickly as a major player in the life and annuity reinsurance space with several large transactions completed since the group was acquired by Sixth Street, a global investment firm, in June 2021.
According to Best’s Capital Adequacy Ratio (BCAR), the group has remained in a favourable risk-adjusted capital position. This was bolstered further by a strong liquidity framework that can provide substantial funds under several key economic stress scenarios.
AM Best noted that TFG’s ERM framework is well-established and continues to evolve with emerging risks.
While no transactions have been initialised in 2023, the growth provided by deals over the previous two years has the group managing approximately $123 billion in assets with operational gains beginning to be realised when removing for asset value fluctuations driven by the rise in interest rates.
Despite the very competitive market environment, AM Best believes that TFG will remain well-capitalised and will maintain its current business strategy of growing its platform by providing risk-transfer solutions to the insurance industry through reinsurance or legal entity acquisitions.
