AM Best upgrades Athene to A+

Athene Group's financial strength rating has been upgraded to A+ by ratings agency AM Best, which praised its expansion of distribution channels to its retail markets and increased use of flow reinsurance in Japan. The outlook has been revised to stable from positive.  

AM Best said Athene Holding Ltd, which is headquartered in the US but has several affiliated Bermuda-based reinsurance companies, had also expanded its pension risk transfer business in the US. 

It added: "The ratings reflect Athene’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

"The rating upgrades reflect a continuing trend of Athene’s improving balance sheet strength. AM Best views Athene’s consolidated risk-adjusted capitalisation as strongest, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by favourable financial flexibility, including significant excess liquidity. ”

Am Best added that Athene, led by chief executive James Belardi, has demonstrated its ability to access capital markets and maintains additional access to capital and liquidity through a liquidity facility, revolving credit facility, Federal Home Loan Bank borrowing capacity and a shelf registration statement, as well as uncalled capital commitments from Athene Co-Invest Reinsurance Affiliates (ACRA) investors, which has been beneficial to Athene’s financial position. 

"The 2022 merger with Apollo Global Management, Inc. is expected to have a longer-term positive impact on Athene’s financial flexibility."

AM Best said its financial leverage metrics supported Athene’s current ratings but noted that AM Best said Athene held elevated allocations to less-liquid investments, which could be impacted materially under adverse market conditions, though default in its investment portfolio has been low to date.

It added that Athene is the consolidation of the organisation’s US operating companies, along with its affiliated reinsurance companies domiciled in Bermuda. Athene Holding operates as the holding company for the US and Bermuda operations.

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