OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) of Minnesota Life Insurance Company and its subsidiary, Securian Life Insurance Company, together referred to as Securian Financial Insurance Group (Securian). AM Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of Securian Casualty Company (Securian Casualty). In addition, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Canadian Premier Life Insurance Company (Canadian Premier) (Toronto, Ontario, Canada).
Concurrently, AM Best has affirmed the Long-Term ICR of “a” (Excellent) of Securian Financial Group, Inc. (SFG) (Delaware) and the Long-Term Issue Credit Rating (Long-Term IR) of “a” (Excellent) of SFG’s $500 million, 4.8% senior unsecured notes, due 2048. AM Best also has affirmed the Long-Term IR of “a+” (Excellent) on the $125 million, 8.25% surplus notes, due 2025, issued by Minnesota Life Insurance Company.
The outlook of these Credit Ratings (ratings) is stable. All companies are headquartered in St. Paul, MN, except where specified.
The ratings reflect Securian’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.
Securian’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at the strongest level, and supports the group’s insurance, business and investment risks. The group’s quality of capital is good, supported by the retention of its XXX/AXXX reserves, organic earnings growth and a well-developed hedging program. Financial leverage is manageable and interest coverage metrics are supportive of its ratings. Invested assets are of high credit quality, with good sector diversification and modest allocations to higher risk assets. AM Best notes that Securian has elevated allocations in commercial mortgage loans, but this is partially mitigated by its strong mortgage underwriting program and overall good performance.
Securian is highly diversified by revenue, earnings and distribution, and continues to expand its reach, most notably in Canada. Premium growth is robust relative to the life insurance industry average, with a significant amount of business coming from recent acquisitions. While earnings have been generally stable in recent years, earnings have been impacted by higher mortality related to the COVID-19 pandemic, and the volatility of the financial markets, which has resulted in unrealized losses on its equity holdings and derivative programs used to hedge indexed products. Financial market volatility also has led to lower fee income. AM Best also notes that earnings for Securian is lower relative to its peer group.
The ratings of Securian Casualty reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
Securian Casualty’s balance sheet strength is supported by strongest risk-adjusted capitalization, as measured by BCAR, solid liquidity and leverage measures and a conservative investment portfolio. Operating performance has been profitable, although metrics trail the credit composite average. The company has an established presence in the contractual liability market and continues to leverage its resources to support future product and market expansions. In addition, the ratings reflect enhancement given Securian Casualty’s integration within the organization, and the company remains a significant contributor and provides added diversification to Securian.
The ratings of Canadian Premier reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. Through organic growth and business acquisitions in recent years, Canadian Premier is becoming increasingly prominent in the finance company and auto-dealer markets, as shown by higher premiums in 2022. The ratings also reflect the strategic importance of Canadian Premier in regard to its parent.
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