Accordia Life and Annuity Company — Moody’s upgrades Global Atlantic (Baa2 senior debt); outlook to stable – Yahoo Finance
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Rating Action:
Moody’s upgrades Global Atlantic (Baa2 senior debt);
outlook to stable
1 March 2022
New York, March 1, 2022 – Moody’s Investors Service (“Moody’s”) has upgraded the senior debt
rating of Global Atlantic (Fin) Company to Baa2 from Baa3 and the insurance financial strength
(IFS) rating of its life insurance subsidiaries to A2 from A3. The outlook on Global Atlantic and its
insurance subsidiaries was changed to stable from positive.
RATINGS RATIONALE
The rating upgrade and stable outlook reflect Global Atlantic’s consistently strong performance
as well as successful execution of the sale to KKR & Co. Inc. without material changes to Global
Atlantic’s business strategy or risk profile. Global Atlantic has shown consistent profitability and
improvement in its market position achieved growing its distribution reach through both its retail
and institutional channels. The company is also no longer reliant on bank financing and has
demonstrated increased access to capital markets. Furthermore, the upgrade reflects Moody’s
expectation that Global Atlantic’s ownership by KKR will continue to help Global Atlantic grow and
manage its business over time. Specifically, KKR’s ownership provides Global Atlantic with increased
access to capital and helps strengthen its distribution channels due to KKR’s relationships with
financial institutions.
The Baa2 senior unsecured debt rating on Global Atlantic and the A2 IFS ratings of its insurance
company subsidiaries are based on the company’s improving business profile, reflecting its growing
and increasingly diversified footprint in the life insurance industry. Global Atlantic’s success in its
retail insurance platform, especially fixed annuities, has been augmented by strong growth of its
institutional business, including block, flow and pension risk transfer reinsurance, and funding
agreement backed notes. Moody’s expects that Global Atlantic will maintain its strict focus on
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profitability and continue to generate consistently strong returns on capital (ROC) while maintaining
good capital levels. The rating agency noted that the company’s strengths are tempered by the rapid
expansion of the balance sheet, investment risk, as well as disintermediation risk and related ALM
complexities.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The following factors could lead to an upgrade of the ratings: 1) profitable premium growth balanced
between life insurance and annuities; 2) strong statutory capital generation that supports organic
growth; 3) reduced investment losses under a stress scenario; and 4) financial and total leverage
(excluding AOCI) of less than 20%.
Conversely, the following factors could lead to a downgrade of the ratings: 1) increased risk profile
or growth appetite, including another material acquisition; 2) reduced profitability of Global Atlantic
with ROC falling below 8% (consolidated GAAP); 3) a decline in the NAIC CAL RBC ratio to below
400%; 4) increased investment and ALM risk; and 5) adjusted financial leverage (excluding AOCI)
consistently above 25% (consolidated GAAP).
AFFECTED RATINGS
The following ratings have been upgraded:
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Accordia Life and Annuity Company: insurance financial strength rating to A2 from A3;
Commonwealth Annuity and Life Insurance Company: insurance financial strength rating to A2 from
A3;
First Allmerica Financial Life Insurance Company: insurance financial strength rating to A2 from A3;
Forethought Life Insurance Company: insurance financial strength rating to A2 from A3;
GA Global Funding Trust: senior secured rating to A2 from A3; senior secured MTN rating to (P)A2
from (P)A3;
Global Atlantic (Fin) Company: long term issuer rating to Baa2 from Baa3; senior unsecured debt
rating to Baa2 from Baa3; subordinated debt rating to Baa3 (hyb) from Ba1 (hyb).
The outlook on all the above entities was changed to stable from positive.
The principal methodology used in these ratings was Life Insurers Methodology published in
September 2021 and available at
https://www.moodys.com/researchdocumentcontentpage.aspx?
docid=PBC_1254133
. Alternatively, please see the Rating Methodologies page on
www.moodys.com for a copy of this methodology.
Global Atlantic is headquartered in New York. As of December 31, 2021, Global Atlantic Financial
Limited, an indirect parent of Global Atlantic (Fin) Company reported total assets of $167 billion and
total shareholders’ equity of $5.5 billion.
REGULATORY DISCLOSURES
For further specification of Moody’s key rating assumptions and sensitivity analysis, see
the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure
form. Moody’s Rating Symbols and Definitions can be found at:
https://www.moodys.com/
researchdocumentcontentpage.aspx?docid=PBC_79004
.
For ratings issued on a program, series, category/class of debt or security this announcement
provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or
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For ratings issued on a support provider, this announcement provides certain regulatory disclosures
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provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent
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docid=PBC_1288235
.
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disclosures for each credit rating.
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VP-Sr Credit Officer
Financial Institutions Group
Moody’s Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Scott Robinson, CFA
Associate Managing Director
Financial Institutions Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody’s Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
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