A.M. Best reiterated the issuer credit ratings (ICR) of “a-” and all debt ratings of Reinsurance Group of America, Incorporated (RGA - Free Report) . Concurrently, the rating giant reiterated the financial strength rating of A+ (Superior) and the ICR of “aa-” of its subsidiaries – RGA Reinsurance Company, RGA Americas Reinsurance Company, Ltd (Bermuda) and its subsidiaries RGA Life Reinsurance Company of Canada and RGA Atlantic Reinsurance Company Ltd. The outlook is stable.
The rating affirmations came on the back of Reinsurance Group’s North American life reinsurance market dominance, modest risk-adjusted capitalization and stable operational results. RGA Life Reinsurance and RGA Atlantic Reinsurance are ace providers of underwriting and facultative capabilities apart from having a spreading footprint in Asia and emerging markets.
The rating also reflects the company’s adequate liquidity to service debt, prudent debt maturity schedule, sturdy interest coverage and financial leverage ratios.
However, extension of business from mortality-risk to higher-risk product lines (that includes longevity reinsurance, long-term care and annuities), and flat mortality in-force metrics of the reinsurance subsidiaries weigh on the positives. The credit rating agency notes that given the changes in reserve mix, there are chances of earnings volatility. Also, there has been an increase in higher-risk assets (mortgage loans, below-investment grade bonds) relative to statutory capital in recent years. Nonetheless, the rating agency stays positive on the reinsurance subsidiaries’ technological platform and the highly integrated global enterprise risk management framework.
The rating agency stated that the ratings might be upgraded if the reinsurance subsidiaries’ risk-adjusted capitalization and operating performance continue to improve and sustain their market dominance. However, the ratings will be subject to downgrade if risk-adjusted capitalization and operating performance suffer.
Rating affirmations or upgrades from credit rating agencies play an important role in retaining investor confidence as well as in maintaining credit worthiness in the market. On the other hand, rating downgrades damage business, apart from increasing the cost of future debt issuances. We believe that strong ratings will help Reinsurance Group to retain investor confidence and help it in writing more businesses, going forward.
Reinsurance Group carries a Zacks Rank #3 (Hold). Some better-raked life insurers are GWG Holdings, Inc. , Health Insurance Innovations, Inc. and Manulife Financial Corporation (MFC - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
A.M. Best reiterated the issuer credit ratings (ICR) of “a-” and all debt ratings of Reinsurance Group of America, Incorporated (RGA - Free Report) . Concurrently, the rating giant reiterated the financial strength rating of A+ (Superior) and the ICR of “aa-” of its subsidiaries – RGA Reinsurance Company, RGA Americas Reinsurance Company, Ltd (Bermuda) and its subsidiaries RGA Life Reinsurance Company of Canada and RGA Atlantic Reinsurance Company Ltd. The outlook is stable.
The rating affirmations came on the back of Reinsurance Group’s North American life reinsurance market dominance, modest risk-adjusted capitalization and stable operational results. RGA Life Reinsurance and RGA Atlantic Reinsurance are ace providers of underwriting and facultative capabilities apart from having a spreading footprint in Asia and emerging markets.
The rating also reflects the company’s adequate liquidity to service debt, prudent debt maturity schedule, sturdy interest coverage and financial leverage ratios.
However, extension of business from mortality-risk to higher-risk product lines (that includes longevity reinsurance, long-term care and annuities), and flat mortality in-force metrics of the reinsurance subsidiaries weigh on the positives. The credit rating agency notes that given the changes in reserve mix, there are chances of earnings volatility. Also, there has been an increase in higher-risk assets (mortgage loans, below-investment grade bonds) relative to statutory capital in recent years. Nonetheless, the rating agency stays positive on the reinsurance subsidiaries’ technological platform and the highly integrated global enterprise risk management framework.
The rating agency stated that the ratings might be upgraded if the reinsurance subsidiaries’ risk-adjusted capitalization and operating performance continue to improve and sustain their market dominance. However, the ratings will be subject to downgrade if risk-adjusted capitalization and operating performance suffer.
Rating affirmations or upgrades from credit rating agencies play an important role in retaining investor confidence as well as in maintaining credit worthiness in the market. On the other hand, rating downgrades damage business, apart from increasing the cost of future debt issuances. We believe that strong ratings will help Reinsurance Group to retain investor confidence and help it in writing more businesses, going forward.
Reinsurance Group carries a Zacks Rank #3 (Hold). Some better-raked life insurers are GWG Holdings, Inc. , Health Insurance Innovations, Inc. and Manulife Financial Corporation (MFC - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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