Global Atlantic’s rating affirmed due to strong growth

Life re/insurer Global Atlantic Group has had its financial strength rating of A (Excellent) as the company has experienced double digit growth in the last five years. 

AM Best said the outlook for the companies, which includes Global Atlantic Re (Bermuda) and Global Atlantic Assurance (Bermuda), was stable.     

“Global Atlantic has experienced double digit growth in the group’s invested assets over the past five years,” AM Best said. “The main drivers in this growth include an increase in direct business written in the company’s individual markets, as well as large block reinsurance transactions. The block transactions introduce some volatility in net premium growth, but the five-year trend is generally positive. 

“The most significant recent block transaction was a $10 billion deal with Manulife Financial Corporation, which includes whole life, annuities, and long-term care (LTC) policies. The LTC risk was ceded to a highly rated third-party global reinsurer.”

AM Best assessed Global Atlantic’s balance sheet strength as very strong and noted its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). 

It said the company’s risk-adjusted capitalisation that AM Best has assessed at the strong level while it had ample liquidity and strong financial flexibility. The investment portfolio is comprised primarily of fixed income instruments including corporate bonds, mortgage loans, structured securities and government securities. 

“The group’s business profile has grown in the annuity and preneed markets,” AM Best said. “Global Atlantic has also expanded its presence in the reinsurance space both domestically and internationally. The group utilises several different structures and treaties to provide reinsurance solutions that strengthen the relationships with their clients. 

“Global Atlantic continues to utilise their sidecars, Ivy I and Ivy II, as co-investment vehicles. These sidecars help Global Atlantic in providing solutions to its reinsurance clients and provides co-investors with more investment opportunities.”

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