CONTACTS:
Igor Bass
Financial Analyst
+1 908 439 2200, ext. 5109
igor.bass@ambest.com
Ken Johnson, CFA, CAIA, FRM
Vice President
+1 908 439 2200, ext. 5056
ken.johnson@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com
FOR IMMEDIATE RELEASE
OLDWICK – JULY 15, 2016
A.M. Best has affirmed the financial strength rating of A++ (Superior) and the issuer credit ratings of “aaa” of New York Life Insurance Company and its wholly owned subsidiary, New York Life Insurance and Annuity Corporation (collectively referred to as New York Life). Additionally, A.M. Best has affirmed the issue ratings on the funding agreement-backed securities (FABS) programs, the outstanding notes issued thereunder and the issue ratings on the existing surplus notes of New York Life Insurance Company. The outlook for each rating is stable. All companies are headquartered in New York, NY. (See below for a detailed listing of the issue ratings.)
New York Life’s ratings reflect the strength of its career agency distribution force, its market position among the leaders in the U.S. life insurance industry, its excellent risk-adjusted capitalization and the consistent operating earnings generated from its ordinary life insurance business. The ratings also consider the organization’s favorable liability profile and commitment to mutuality. New York Life enjoys the competitive advantage of its core career agency force, which has led the industry in Million Dollar Round Table membership for 61 consecutive years. The agency channel has contributed to the organization’s strong persistency and prominent market position within the individual life market.
New York Life’s sizeable in-force block of traditional life insurance and stable, long-term cash flows are the foundation of its operating performance. The conservative nature of the company’s product portfolio, together with its large block of ordinary life business, translates into one of the more creditworthy liability profiles in the industry. Additionally, A.M. Best notes that New York Life has an added measure of financial flexibility in support of its strong risk-adjusted capital position through the management of its policyholder dividend scale. A.M. Best also notes the diversification provided by New York Life’s Investments Group, reflective of its strong spread revenue and asset-based fees that are generated from the $528 billion of assets under management as of year-end 2015.
While A.M. Best believes that New York Life’s investment management capabilities remain strong, the potential exists for higher-than-normal, albeit manageable, credit losses within its general account investment portfolio. The organization maintains significant holdings in public-private corporate bonds and structured securities. In addition, A.M. Best notes that New York Life has a sizable allocation to non-traditional assets, namely investments in private equity of 18.6% and hedge funds of 1.5%, representing a total of approximately 20% of total capital.
New York Life’s current adjusted GAAP financial leverage, excluding accumulated other comprehensive income, together with secured and non-recourse debt, is well within A.M. Best’s guidelines for its current rating level. Also, GAAP interest coverage is very strong. Additionally, A.M. Best views favorably New York Life’s proactive management of interest rate risk through ongoing hedging, product design, dynamic asset rebalancing and its disciplined approach to sales.
The following issue ratings have been affirmed:
New York Life Funding—program rating of “aaa”
New York Life Global Funding—program rating of “aaa”
— “aaa” on all outstanding notes issued under the program
New York Life Insurance Company—
— “aa” on $1 billion 5.875% surplus notes, due May 2033
— “aa” on $1 billion 6.75% surplus notes, due November 2039
New York Life Capital Corp—
— AMB-1+ on the commercial paper program
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activityweb page.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.
European Union Disclosures
A.M. Best – Europe Rating Services Limited (AMBERS), a subsidiary of A.M. Best Rating Services, Inc., is an External Credit Assessment Institution (ECAI) in the European Union (EU). Therefore, credit ratings issued and endorsed by AMBERS may be used for regulatory purposes in the EU as per Directive 2006/48/EC.
Australian Disclosures
A.M. Best Asia-Pacific Limited (AMBAP), Australian Registered Body Number (ARBN No.150375287), is a limited liability company incorporated and domiciled in Hong Kong. AMBAP is a wholesale Australian Financial Services (AFS) Licence holder (AFS No. 411055) under the Corporations Act 2001. Credit ratings emanating from AMBAP are not intended for and must not be distributed to any person in Australia other than a wholesale client as defined in Chapter 7 of the Corporations Act. AMBAP does not authorize its Credit Ratings to be disseminated by a third-party in a manner that could reasonably be regarded as being intended to influence a retail client in making a decision in relation to a particular product or class of financial product. AMBAP Credit Ratings are intended for wholesale clients only, as defined.
Credit Ratings determined and disseminated by AMBAP are the opinion of AMBAP only and not any specific credit analyst. AMBAP Credit Ratings are statements of opinion and not statements of fact. They are not recommendations to buy, hold or sell any securities or any other form of financial product, including insurance policies and are not a recommendation to be used to make investment /purchasing decisions.
Important Notice: A.M. Best’s Credit Ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. For additional information regarding the use and limitations of credit rating opinions, as well as the rating process, information requirements and other rating related terms and definitions, please view Understanding Best’s Credit Ratings.
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