Fitch Downgrades 34 Life Insurance Groups Following Industry-Wide Review.Business Editors
CHICAGO--(BUSINESS WIRE)--Sept. 19, 2002
Fitch Ratings Fitch Ratings
An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has completed a comprehensive review of all of its ratings for the North American North American
named after North America.
North American blastomycosis
see North American blastomycosis.
North American cattle tick
see boophilusannulatus. life insurance industry, and has downgraded ratings for 34 life insurance groups. The downgrades impacted the ratings of 41% of Fitch's life insurance ratings universe, and affected companies with a combined $1.1 trillion One thousand times one billion, which is 1, followed by 12 zeros, or 10 to the 12th power. See space/time.
(mathematics) trillion - In Britain, France, and Germany, 10^18 or a million cubed.
In the USA and Canada, 10^12. in assets. Highlights of Fitch's rating actions, which affected both insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual.
An insurer is frequently an insurance company and is also known as an underwriter. financial strength (IFS) and debt ratings, are listed below. Details on a teleconference that Fitch fitch: see polecat. is hosting at 2:00PM EST EST electroshock therapy.
electroshock therapy today to discuss the review are also included below.
The comprehensive industry review was announced on August 14, 2002. It is the result of Fitch's belief that recent adverse performance within the investment markets, together with unfavorable competitive and product trends inherent in Fitch's long standing Negative Rating Outlook for the life insurance industry, required an accelerated recognition of such trends into ratings levels generally.
The mean IFS rating within Fitch's ratings universe has fallen from 'AA' (low in range) to 'AA-' (high in range), and the mean senior debt rating has fallen from 'A' to 'A-'. These ratings still imply a very high level of financial strength and credit quality for the industry.
Key methodology enhancements that drove many of the rating actions include:
-- A reassessment Reassessment
The process of re-determining the value of property or land for tax purposes.
Property is usually reassessed on an annual basis. You may request a "reassessment" if you disagree with your assessment. of product risk within the industry, with higher risk recognition for variable annuity Variable Annuity
An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. and other capital markets-intensive products;
-- Implementation of higher capital guidelines guidelines,
n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. at all ratings levels recognizing both higher volatility Volatility
1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time.
2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in capital and slower rates of capital formation throughout the industry; and
-- Tightening of various fundamental company characteristics expected at each rating level to align align (līn),
v to move the teeth into their proper positions to conform to the line of occlusion. better with Fitch's prospective views of heightened industry risks driven by the competitive environment.
As a result of today's ratings actions there will be greater stability in Fitch's life ratings in the near-to-intermediate term. Accordingly, Fitch has revised its industry Rating Outlook to Stable from Negative. Fitch will comment in more detail on its industry outlook in January January: see month. 2003 with the publication of its annual 'Review & Outlook: 2002/2003 U.S Life Insurance Industry' report.
Fitch will host a teleconference at 2:00PM EST to discuss the comprehensive review. Participants should call 1-877-897-0442 and international participants should dial 1-706-643-7396 five minutes prior to the beginning of the call and give the title of the call 'Fitch'. The call leader is Julie JULIE Joint Utility Locating Information for Excavators
JULIE Jena University Language and Information Engineering (Germany) Burke The name Burke (from Irish Gaelic de Burca, of Norman origin). In English the meaning of the name Burke is "fortified hill." See also Berkley. Places
Fitch has issued a special report titled 'Comprehensive Life Insurance Industry Review (North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. )' that summarizes in more detail the rationale rationale (rash´nal´),
n the fundamental reasons used as the basis for a decision or action. for the comprehensive review, how Fitch approached the review and the results of the review. For a copy of the report, visit the Fitch Ratings web site at 'www.fitchratings.com' or contact the Rating Desk at 1-800-893-4824.
The following is a highlighted summary of the ratings of each North American life insurance organization rated by Fitch, grouped by IFS rating category. The ratings shown in this exhibit include the IFS rating of the group and/or and/or
Used to indicate that either or both of the items connected by it are involved.
Usage Note: And/or is widely used in legal and business writing. its largest operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. . The senior debt ratings are for the parent holding company, unless there is no holding company, in which case they are for the primary operating company operating company
A business that engages in transactions with outsiders. . Other ratings listed include long term issuer (LT), subordinated debt Subordinated Debt
A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". (Sub), and surplus notes (SN) ratings.
IFS Actions & Outlooks Debt Actions & Outlooks AAA IFS Ratings AIG Life Companies 'AAA'/Affirm/Stable 'AAA'/Affirm/Stable Massachusetts Mutual 'AAA'/Affirm/Stable 'AA' (SN)/Affirm/ Stable New York Life 'AAA'/Affirm/Stable 'AA' (SN)/Affirm/ Stable Northwestern Mutual 'AAA'/Affirm/Stable 'AAA'/Affirm/Stable State Farm Life 'AAA'/Affirm/Stable 'NA' TIAA 'AAA'/Affirm/Stable 'AAA'/Affirm/Stable AA+ IFS Ratings Aegon USA 'AA+'/Remain RW Neg 'AA-'/Remain RW Neg Great-West Life 'AA+'/Dwngrd/Stable 'AA-'/Dwngrd/Stable Jackson National Life 'AA+'/RW Neg 'AA-' (SN)/RW Neg Jefferson-Pilot 'AA+'/Dwngrd/Stable 'AA-'/Dwngrd/Stable Manufacturers Life 'AA+'/Dwngrd/Stable 'AA-'(Sub)/Dwngrd/ Stable Pacific Life 'AA+'/Affirm/Stable 'AA-' (SN)/Affirm/ Stable Thrivent 'AA+'/Affirm/Stable 'NA' Western-Southern 'AA+'/Dwngrd/Stable 'NA' AA IFS Ratings AFLAC 'AA'/Affirm/Stable 'A+'/Affirm/Stable Cincinnati Financial 'AA'/Affirm/Stable 'A+'/Affirm/Stable Citigroup Life Cos. 'AA'/Affirm/Stable NA' Connecticut General 'AA'/Affirm/Stable 'A'/Dwngrd/Stable Equitable Life 'AA'/Affirm/Stable 'A+'/Affirm/Stable GE Capital Assurance 'AA'/Affirm/Stable 'A+'/Affirm/Stable Guardian 'AA'/Dwngrd/Stable 'NA' Hartford Life 'AA'/Dwngrd/Stable 'A'/Dwngrd/Stable IDS Life 'AA'/Affirm/Stable 'NA' ING America 'AA'/Dwngrd/Stable 'AA-'/RW Neg John Hancock 'AA'/Dwngrd/Stable 'A+'/Dwngrd/Stable Lincoln National 'AA'/Affirm/Stable 'A'/Dwngrd/Stable Metropolitan Life 'AA'/Dwngrd/Stable 'A'/Dwngrd/Stable Minnesota Life 'AA'/Dwngrd/Stable 'A+' (SN)/Dwngrd/ Stable Principal 'AA'/Affirm/Stable 'A'/Affirm/Stable Sun Life (Canada) 'AA'/Dwngrd/Stable 'AA-'/Dwngrd/Stable AA- IFS Ratings American United Life 'AA-'/Affirm/Stable 'A' (SN)/Affirm/ Stable Anthem 'AA-'/Affirm/Stable 'A-'/Affirm/Stable Canada Life 'AA-'/Dwngrd/Stable 'A+'/Dwngrd/Stable CNA Life 'AA-'/Affirm/Stable 'BBB'/Affirm/Stable CUNA Mutual 'AA-'/Dwngrd/Stable 'A+' (LT)/Dwngrd/ Stable Horace Mann 'AA-'/Affirm/Neg 'A-'/Affirm/Neg Modern Woodmen 'AA-'/Dwngrd/Stable 'NA' Mutual of America 'AA-'/Dwngrd/Stable 'NA' Mutual of Omaha 'AA-'/Affirm/Stable 'NA' Ohio National 'AA-'/Dwngrd/Stable 'A-'/Dwngrd/Stable Penn Mutual 'AA-'/Affirm/Stable 'NA' Phoenix Life 'AA-'/Dwngrd/Stable 'A-'/Dwngrd/Stable Protective 'AA-'/Dwngrd/Stable 'A-'/Dwngrd/Stable Prudential of America 'AA-'/Affirm/Stable 'A'/Affirm/Stable Safeco Life 'AA-'/Affirm/Stable 'A-'/Affirm/Stable Security Benefit 'AA-'/Affirm/Stable 'A' (SN)/Affirm/ Stable Standard Insurance 'AA-'/Affirm/Stable 'A-'/Affirm/Stable UnumProvident 'AA-'/Affirm/Stable 'A-'/Affirm/Stable Wellpoint 'AA-'/Affirm/Stable 'A-'/Affirm/Stable A+ IFS Ratings Aetna Life & Casualty 'A+'/Affirm/Neg 'BBB+'/Affirm/Neg Beneficial Life 'A+'/Dwngrd/Stable 'NA' Business Men's Assurance 'A+'/Dwngrd/RW Evolving 'NA' CGU Life 'A+'/Dwngrd/Stable 'NA' Combined Insurance (Aon) 'A+'/Remain RW Neg 'A-'/Remain RW Neg Great American 'A+'/Affirm/Stable 'BBB+'/Affirm/ Stable MONY 'A+'/Dwngrd/Neg 'BBB+'/Affirm/Neg National Life of Vermont 'A+'/Dwngrd/Stable 'A-' (SN)/Dwngrd/ Stable Navy Mutual 'A+'/Dwngrd/Stable 'NA' Union Central Life 'A+'/Affirm/Stable 'A-' (SN)/Affirm/ Stable A IFS Ratings Allmerica Financial 'A'/Affirm/Stable 'BBB'/Affirm/Stable Delphi 'A'/Affirm/Stable 'BBB'/Affirm/Stable Fidelity & Guaranty 'A'/Dwngrd/Stable 'NA' Lafayette Life 'A'/Dwngrd/Stable 'NA' MTL 'A'/Dwngrd/Stable 'NA' Pan American 'A'/Affirm/Stable 'NA' Sage Life 'A'/Remain RW Evolving 'NA' Scottish Annuity & Life 'A'/Affirm/Stable 'NA' Security Mutual Life 'A'/Dwngrd/Stable 'BBB+'(SN)/Dwngrd/ Stable Trustmark 'A'/Dwngrd/Stable 'NA' UICI 'A'/Affirm/Stable 'NA' A- IFS Ratings American Skandia 'A-'/Dwngrd/Evolving 'NA' Boston Mutual 'A-'/Dwngrd/Stable 'NA' Guarantee Trust 'A-'/Affirm/Neg 'NA' BBB+ IFS Ratings Annuity & Life Re 'BBB+'/Remain RW Neg 'NA' BBB IFS Ratings Ceres Group (Continental) 'BBB'/Remain RW Evolving 'NA' BB IFS Ratings Ceres Group (Central) 'BB'/Affirm/Neg 'NA' B IFS Ratings Conseco Group 'B'/Remain RW Neg 'D'/Affirm The following are life insurance groups with debt ratings from Fitch that currently have not been assigned IFS ratings, and thus were not including in the list above: Life Group Sr. Debt/LT Action/Outlook/Watch Americo Life 'BB+' Affirm/Stable Amerus Life Insurance 'BBB' Dwngrd/Stable Nationwide 'A+' Affirm/Stable Presidential Life 'BBB-' Affirm/Neg RGA 'A-' Affirm/Stable Torchmark 'A' Dwngrd/Stable
Details supporting all of the ratings, Rating Outlook and Rating Watch changes noted above can be found in a series of separate press releases that are being issued later today for each affected life insurance group. Separate press releases are not being issued for life insurers whose ratings remain unchanged.