Finest’s Information & Analysis Service – March 23, 2022 03:10 PM (EDT)
Oldwick //BestWire// – AM Finest has affirmed the Monetary Power Ranking (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 corporations collectively are known as Penn Mutual Group (Penn Mutual). Concurrently, AM Finest has affirmed the Lengthy-Time period Situation 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 replicate Penn Mutual’s stability sheet power, which AM Finest assesses as strongest, in addition to its robust working efficiency, favorable enterprise profile and acceptable enterprise threat administration.
Penn Mutual’s risk-adjusted capitalization is taken into account to be on the strongest stage, 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 incorporates some built-in enhanced threat however continues to supply favorable web yields relative to friends and business 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 regarded enough to assist 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 range 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 device, ACE, which has allowed advisers entry to real-time knowledge, significantly within the present difficult atmosphere. Total, Penn Mutual’s GAAP working efficiency considerably improved in 2021, in contrast with a decline within the prior yr, resulting from continued robust gross sales throughout many enterprise strains and extra funding revenue. 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 rules 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 have been revealed on AM Finest’s web site. For all score data regarding the discharge and pertinent disclosures, together with particulars of the workplace answerable for issuing every of the person scores referenced on this launch, please see AM Finest’s Current Ranking Exercise net web page. For added data relating to the use and limitations of Credit score Ranking 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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