AM Best assigns preliminary credit score to Sutton Life Re, Ltd.
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OLDWICK, NJ – (BUSINESS WIRE) –
AM Best assigned a Preliminary Credit Assessment (PCA) to Sutton Life Re, Ltd. (Sutton Life Re) with a financial strength rating of A-pca (excellent) and a long-term issuer credit rating of “a-” pca (excellent). The outlook attributed to these PCAs is stable.
The BCPs reflect the strength of Sutton Life Re’s balance sheet, which AM Best considers to be very strong, as well as its adequate operational performance, neutral business profile and appropriate management of business risks. Sutton Life Re is a recently established Bermuda reinsurer affiliated with Sixth Street Partners, LCC (Sixth Street), a global investment firm which has committed significant capital in the life insurance / annuity field over the past year.
On December 3, 2021, Allianz Life Insurance Company of North America announced reinsurance agreements with Resolution Life Group Holdings LP and Talcott Resolution Life Insurance Company (Talcott), the latter of which is affiliated with Sixth Street and Sutton Life Re. transaction, approximately $ 20 billion of fixed index annuity liabilities will be placed with Talcott and Sutton Life Re. Upon closing of this transaction by the end of 2021, Talcott and Sutton Life Re will manage a liability and a surplus of $ 111 billion on a pro forma basis.
AM Best evaluated the proforma balance sheet of Sutton Life Re and projected the operating results under the PCA with ad hoc evaluations, and concluded that the entity would have a very strong balance sheet and adequate operating performance. Best’s capital adequacy ratio results show that the post-trade pro forma balance sheet is at the highest estimated level, in part due to relatively conservative investment allocations. In addition, Sutton Life Re will use Talcott’s already established resources and policies and procedures for the management of investments and for its enterprise risk management framework. AM Best anticipates that Sutton Life Re will engage in future transaction activities as it executes its strategy of engaging in reinsurance flow transactions and bulk acquisitions.
Despite these favorable assessments, AM Best notes that, as with any projection, actual results may vary significantly, resulting in different results. Confidence in projections is bolstered by the experienced management teams of Sutton Life Re and its immediate holding company, and by the availability of support from the organization’s subsidiaries.
This press release relates to preliminary credit reports that have been posted on the AM Best website. For all review information relating to the publication and relevant disclosures, including details of the office responsible for issuing each of the individual reviews referenced in this publication, please see AM Best’s Recent rating activity Web page. For more information on the use and limitations of rating and credit assessment notices, please see Best Credit Score Guide. For more information on the proper use of Best’s credit scores, Best’s preliminary credit reports, and AM Best’s press releases, please see Guide to Proper Use of Best Ratings and Reviews.
AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Based in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.
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Source: AM Best