A.M. Best Co. announced that it has assigned a financial strength rating of “A-” (Excellent) to Aetna Life and Casualty (Bermuda) Ltd. (AL&C) with a stable outlook.
“The rating reflects AL&C’s favorable earnings, its excellent stand-alone capitalization and the financial strength of its ultimate parent, Aetna Inc.,” said Best. “Offsetting factors include A.M. Best’s anticipation of a modest decline in AL&C’s risk-based capital ratios during the medium term, driven by increased sales.”
The rating agency noted: “AL&C, currently a writer of Aetna’s expatriate business, is expected to expand its product lines to serve overseas nationals in addition to further expansion of its domestic expatriate business. In conjunction with this expansion, A.M. Best anticipates premium growth could outpace surplus growth, reducing the firm’s excellent risk-based capital ratio.”
It also indicated that Aetna “continues to generate excellent financial returns and improve its financial fundamentals.” Best said it “expects these trends to continue during the medium term, albeit more modestly, given pricing competition in the industry. Furthermore, A.M. Best believes AL&C’s favorable earnings trend is also expected to continue during the medium term, growing the firm’s surplus.”
“Aetna has successfully completed a strategic and financial turnaround and also maintains conservative financial leverage, high quality invested assets and excellent financial flexibility,” the bulletin concluded.
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