AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of 'a-' of
The outlook of these Credit Ratings (ratings) is negative.
The ratings reflect Thaire Life's balance sheet strength, which AM Best categorises as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
Thaire Life's balance sheet strength assessment is underpinned by risk-adjusted capitalisation that remains at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). While the company has exhibited a high dividend payout ratio over recent years, retained earnings have remained sufficient to support business growth. Other balance sheet factors include the company's moderate risk investment portfolio, which includes holdings of higher risk asset classes such as equities and mutual funds. The company's modest absolute capital base increases the sensitivity of risk-adjusted capitalisation, particularly to future potential increases in mortality rates given its concentration to life business. Nonetheless, AM Best does not view the current impact of the pandemic on the company's financial condition to be significant given the limited amount of COVID-19-related claims that the company has received to date. This largely reflects the low level of COVID-19 cases and deaths experienced in
AM Best views the company's operating performance as strong, as demonstrated by a five-year average return-on-equity ratio of 23% (2015-2019). Thaire Life has a track record of favorable earnings driven by its strong underwriting performance. Despite this, underwriting results in 2019 depict a declining trend, albeit remaining profitable, as a result of weakened loss experience from both health and life classes of business. The negative outlooks reflect AM Best's view that an increasingly competitive operating environment in
AM Best assesses Thaire Life's business profile as neutral. The company is the only domestic life reinsurer in
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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 media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in
(C) 2020 Electronic News Publishing, source