A.M. Best Affirms Ratings of Symetra Financial and Its Subsidiaries.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A (Excellent) and issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "a+" of Symetra Life Insurance Company (Symetra Life) (Bellevue, WA) and its subsidiary, First Symetra National Life Insurance Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . Concurrently, A.M. Best has affirmed the ICR of "bbb+" and the debt ratings of "bbb+" on $300 million of 6.125% senior unsecured notes and "bbb-" on its $150 million of fixed-to-floating rate unsecured junior subordinated notes of Symetra Financial Corporation (Symetra) (Delaware). The outlook for all ratings is stable. These ratings reflect Symetra's strong liquidity and risk-based capital position, the consistent profitability of its four operating segments and minimal GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). balance sheet intangibles. Additionally, the company's balance sheet carries somewhat less asset risk than many of its similarly rated peers, with its investment portfolio containing virtually no exposure to subprime residential mortgages and limited exposure to Alt-A residential mortgages. A.M. Best also notes that the company has made significant progress recently in achieving broad based sales growth across its various product lines; however, this growth has been predominately driven by fixed annuity Fixed Annuity An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal. sales. Offsetting these strengths is Symetra's heavy business concentration in commoditized spread-based product lines and its exposure to reinvestment risk Reinvestment Risk The risk that future proceeds will have to be reinvested at a lower potential interest rate. Notes: This term is usually heard in the context of bonds. in its large block of immediate annuities immediate annuity An annuity that is purchased with a lump sum and that begins making payments one period after the purchase. Immediate annuities are most commonly purchased by people who have accumulated a sum of money and are ready for retirement. and structured settlements, which accounts for nearly one-half of Symetra 's statutory general account reserves. However, A.M. Best notes that initiatives to closely manage asset/liability duration matching, its focus on growing both sales of shorter duration immediate annuities and its funding services business, combined with strategic investments in equities and hedge funds, should produce a higher total return in support of these long-tail liability exposures. Additional offsetting factors include: concerns over the near-term profitability of the group medical stop loss business; although, A.M. Best notes that Symetra has a strong history of profitability in this product line. Symetra's financial leverage is moderate and is expected to gradually decline as shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. grows. The group's pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma adjusted debt-to-capital ratio is approximately 23%, incorporating some equity credit for its $150 million of hybrid securities. In addition, interest coverage is strong and projected to remain well within A.M. Best's guidelines for the group's current ratings. For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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