KEYPORT LIFE INSURANCE CLAIMS PAYING ABILITY RATING 'AA-'
KEYPORT LIFE INSURANCE CLAIMS PAYING ABILITY RATING 'AA-' CHICAGO, Dec. 20 /PRNewswire/ -- Duff & Phelps Credit Rating Company
today rated the claims paying ability of Keyport Life Insurance Company 'AA-' (double-A-minus). The rating reflects Keyport's strong profitability, improved leverage; experienced, efficient, service- oriented management; and extensive asset-liability management practice.
Keyport is an annuity writer domiciled in Rhode Island with corporate headquarters in Boston. The firm was previously known as Keystone Provident Life Insurance Company and was owned by Travelers Corp. In 1988, when the company was bought by Liberty Mutual Insurance Group, its name was changed to Keyport Life as part of the sale agreement. Keyport's senior management remained in place after the sale. Keyport specializes in writing single premium deferred annuities (SPDA's). SPDA's account for over 90 percent of the firm's premium income. Keyport also writes variable annuities and a very small number of individual life policies. Annuity products are distributed through major New York Stock Exchange firms, financial institutions, banks, and regional brokers. The company's profitability has been very good for the last several years. Keyport's return on adjusted surplus was over 20 percent in 1989 and 1990. In the first nine months of 1991, reported operating income was $42.3 million. Keyport received a $100 million surplus contribution from its parent in 1991 which significantly improved the firm's leverage. Statutory capital & surplus was $307 million as of Sept. 30, 1991. Keyport receives other substantial benefits from its relationship with Liberty Mutual as it utilizes other Liberty subsidiaries for investment services and product distribution. The firm's investment portfolio is concentrated in bonds (84 percent of invested assets), cash, and short term securities. Keyport holds very little in mortgages and equities, and owns no real estate. Of its total invested assets, 91 percent are rated investment grade. The firm's non-investment grade bonds to adjusted surplus ratio of 188 percent has been reduced from 310 percent at the beginning of 1991. Several sophisticated techniques are used to evaluate the firm's exposure to interest rate risk and policy surrenders, such as cash flow modeling and option adjusted duration analysis. Keyport actively manages the duration mismatch between its assets and liabilities, and has effectively decreased this mismatch through various hedging techniques over the last several years. -0- 12/20/91 /CONTACT: James B. Auden of Duff & Phelps, 312-368-3146/ CO: Keyport Life Insurance Company ST: Massachuesetts IN: INS SU: RTG SB -- NY064 -- 4454 12/20/91 15:11 EST
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|Date:||Dec 20, 1991|
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