A.M. Best Affirms Ratings of MetLife, Inc and Its Affiliates

Jun 06,2008 00:00 by Business-Wire
OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Superior) and issuer credit ratings (ICR) of “aa” of Metropolitan Life Insurance Company (MLIC) (New York, NY) and its key life/health affiliates. MLIC is the primary insurance company of MetLife, Inc (MetLife) (New York, NY) (NYSE: MET - News). Concurrently, A.M. Best has affirmed the ICR of “a” and debt ratings of MetLife.

A.M. Best also has affirmed the FSRs of A (Excellent) and ICRs of “a ” of MetLife Auto and Home (MetLife Auto and Home) and its eight fully reinsured companies in the business unit led by Metropolitan Property and Casualty Insurance Company (Warwick, RI).

Additionally, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a ” of Texas Life Insurance Company (Waco, TX). The outlook for all ratings is stable. (See link below for a detailed list of the companies and ratings.)

The ratings reflect MetLife’s well established brand, diverse business mix, continued growth in various segments and its very strong position in its core markets. The ratings also reflect the overall balance of the organization provided by its core business lines through its property/casualty, international and reinsurance affiliates.

Through its diversified distribution channels, MetLife maintains the scale necessary to be an industry leader in its various product lines. The group continues to pursue its strategic focus in the life and annuity markets by expanding both its domestic and international market share through organic growth, joint ventures and strategic acquisitions. Furthermore, MetLife is focused on divesting its non-core operations as evidenced by its recent announcement to divest its stake in Reinsurance Group of America Incorporated (RGA) (Chesterfield, MO) through a tax-free split off. MLIC manages a balanced investment portfolio with a moderate risk appetite, which traditionally produces favorable contributions to earnings and capital through realized and unrealized gains.

Offsetting these rating strengths are MetLife’s declining sales recorded in recent years in its individual life and group annuity lines, which in part, are due to volatile equity markets, its moderate risk-adjusted capital and leverage positions that A.M. Best believes were impacted by the rapid growth and expansion experienced through its acquisitions. In addition, A.M. Best believes that MetLife’s appetite for share repurchases and continued dividends from its operating affiliates will continue to stress its risk-adjusted capital position.

The ratings of MetLife Auto & Home reflect its solid capitalization, consistent operating performance, strong enterprise risk management practices and successful multiple channel distribution network. Partially offsetting these positive rating factors is the group’s moderately elevated underwriting leverage and its exposure to weather-related events.

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Source: A.M. Best Co.