Fitch Ratings has upgraded the insurance financial strength rating of Athene Annuity & Life Assurance Company to A- from BBB+.
Athene is an indirect subsidiary of Athene Holding, a privately held Bermuda-domiciled insurance holding company.
Fitch said the upgrade reflects the company’s strong earnings, improved capitalisation following a $1.3 billion equity capital raise, lack of financial leverage and market leadership position in the fixed-indexed annuity market. Offsetting these positives are the company's very rapid acquisition-driven growth, relatively short operating history and somewhat aggressive investment portfolio.
AHL's operating earnings have been strong since inception. Fitch believes the favourable economics of recent acquisitions and favourable market conditions have allowed the company to earn returns in excess of traditional life insurance companies.
As a result of the October 2013 acquisition of the US annuity and life operations of Aviva, AHL is now the fifth largest issuer of fixed-indexed annuities in the US.