Finest’s Information & Analysis Service – March 23, 2022 03:10 PM (EDT)
Oldwick //BestWire// – AM Finest has affirmed the Monetary Energy Score (FSR) of A+ (Superior) and the Lengthy-Time period Issuer Credit score Rankings (Lengthy-Time period ICRs) of “aa-” (Superior) of The Penn Mutual Life Insurance coverage Firm (Penn Mutual Life) (Horsham, PA) and its wholly owned subsidiaries, The Penn Insurance coverage and Annuity Firm (Wilmington, DE), Vantis Life Insurance coverage Firm (Windsor, CT) and The Penn Insurance coverage and Annuity Firm of New York (Brewster, NY). These firms collectively are known as Penn Mutual Group (Penn Mutual). Concurrently, AM Finest has affirmed the Lengthy-Time period Subject Credit score Rankings (Lengthy-Time period IRs) of “a” (Wonderful) on the $200 million, 6.65% surplus notes, due 2034, and the Lengthy-Time period IR of “a” (Wonderful) on the $200 million, 7.625% surplus notes, due 2040, issued by Penn Mutual Life. The outlook of those Credit score Rankings (scores) is secure.
The scores mirror Penn Mutual’s stability sheet energy, which AM Finest assesses as strongest, in addition to its sturdy working efficiency, favorable enterprise profile and applicable enterprise threat administration.
Penn Mutual’s risk-adjusted capitalization is taken into account to be on the strongest degree, as measured by Finest’s Capital Adequacy Ratio (BCAR), and is supported by the corporate’s constant development in capital over the previous few years and its effectively managed funding portfolio, which comprises some built-in enhanced threat however continues to provide favorable web yields relative to friends and trade benchmarks. The stability sheet is additional supported by good liquidity metrics and total monetary flexibility of the group. The group’s leverage and protection metrics are pretty modest and thought of satisfactory to help its present operations.
Penn Mutual traditionally has reported favorable development in its core life insurance coverage merchandise, although more-recently this has been offset with stagnant annuity gross sales because of the pandemic. The corporate advantages from its variety in product choices, distribution capabilities and partnerships, which has resulted in elevated market share, albeit unchanged in 2020. AM Finest notes that Penn Mutual has benefited positively from its software and underwriting software, ACE, which has allowed advisers entry to real-time information, notably within the present difficult surroundings. Total, Penn Mutual’s GAAP working efficiency considerably improved in 2021, in contrast with a decline within the prior 12 months, as a consequence of continued sturdy gross sales throughout many enterprise strains and extra funding earnings. As well as, AM Finest notes that statutory working metrics proceed to be strained considerably, associated to gross sales of sure merchandise, unfavorable mortality and new reserve laws affecting some elevated volatility.
Penn Mutual’s concentrate on threat administration displays its formalized framework, together with well-communicated threat urge for food and tolerances, multi-combined state of affairs stress testing and a threat tradition that’s strictly embedded throughout all ranges of the group.
This press launch pertains to Credit score Rankings which were revealed on AM Finest’s web site. For all ranking data referring to the discharge and pertinent disclosures, together with particulars of the workplace liable for issuing every of the person scores referenced on this launch, please see AM Finest’s Current Score Exercise internet web page. For extra data concerning the use and limitations of Credit score Score opinions, please view Information to Finest’s Credit score Rankings. For data on the right use of Finest’s Credit score Rankings, Finest’s Efficiency Assessments, Finest’s Preliminary Credit score Assessments and AM Finest press releases, please view Information to Correct Use of Finest’s Rankings & Assessments.
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