by John Darer® CLU ChFC CSSC RSP
A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of "a+" of Symetra Life Insurance Company and its subsidiary, First Symetra National Life Insurance Company of New York (New York, NY) in an October 28, 2011 press release.
A.M. Best notes that Seattle based Symetra is primarily an annuity company. They said nearly 85% of the Symetra's general account reserves are comprised of individual annuities, and over one-third of that amount represents income annuities (i.e., structured settlements and payout annuities)
Income annuities have limited pricing flexibility and generate narrow spreads relative to traditional fixed deferred annuities. Additionally, due to the long-tailed nature of the liabilities, it is difficult to find assets with similar durations. Hence, the financial performance of this line is particularly sensitive to certain interest rate scenarios. While A.M. Best believes that Symetra will be challenged to maintain or improve its investment portfolio yields without materially increasing credit risk, it also believes that Symetra's relatively strong risk-adjusted capital position and fairly liquid, high-quality investment portfolio essentially mitigates the potential degradation in operating performance should low interest rates persist.
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