Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.
01 Mar 2011
Life & health subsidiaries' outlook changed to negative; P&C subsidiaries remain stable
New York, March 01, 2011 -- Moody's Investors Service has affirmed the debt ratings of Assurant Inc.
(NYSE: AIZ, senior debt at Baa2), and the A3 insurance
financial strength ("IFS") ratings of the group's primary life and health
insurance operating subsidiaries ("Assurant L&H"),
but changed the outlook for these entities to negative from stable.
In the same action, Moody's affirmed the IFS ratings of Assurant's
primary P&C subsidiaries ("Assurant P&C") at A2,
with the outlook remaining stable.
The negative outlook at Assurant L&H is primarily driven by the adverse
consequences of recent national health care reform on the group's
key individual and small group medical insurance businesses as well as
weaker expected profitability in its employee benefits segment.
Also, according to Moody's Senior Credit Officer Paul Bauer,
"A continued deterioration in the credit strength of Assurant L&H
could lead to a downgrade of Assurant's debt ratings."
LIFE & HEALTH OPERATIONS
The rating affirmation of Assurant L&H was based on the companies'
established market positions in several specialized life and health markets,
generally good asset quality and solid financial flexibility at the consolidated
parent company level. Assurant L&H benefits from key exclusive
distribution relationships in its core markets, notably, with
the SCI funeral home chain (for pre-funded funeral insurance),
State Farm, and with banks and other financial institutions.
Commenting on the change in outlook to negative, Moody's said
that health care reform was having a more adverse effect on Assurant's
health business at a faster pace than Moody's had anticipated.
"The new 80% minimum medical loss ratio (MLR), required
as of January 1, 2011, may have permanently altered the business
model for individual and small group medical providers like Assurant L&H,"
said Vice President and Senior Credit Officer, Laura Bazer.
In particular, the higher-than-historical required
MLR raises the specter of policyholder rebates, diminishing the
business' profit profile starting in 2011. Assurant projects
its health segment to break even in 2011, due to the likelihood
that it will have to pay policyholder rebates under the higher MLR and
continue to streamline the organization.
In addition, the health segment's distribution model is under
a cloud of uncertainty. "Sharp commission cuts required to
maintain the company's core indemnity health products' viability,
may hurt sales and reduce health membership further in 2011" the
analyst noted. The rating agency said that although the company
has launched a number of new supplementary products in recent quarters,
it is too early to know if these will gain sufficient traction to help
fill the sales and earnings gap for both Assurant L&H and its key
Separately, the company's employee benefits (EB) segment may
also earn less starting in 2011, according to Moody's.
This is due to the likelihood that Assurant will lower its interest rate
assumption for establishing reserves on new long term disability claims,
indicating that recent quarters' reported earnings have been above
the EB segment's underlying sustainable earnings. The company
announced a $306 million goodwill charge for 4Q10 for its health
and employee benefits business, due to health care reform,
low interest rates, and the continuing weak economic environment.
The rating agency said the ratings of Assurant L&H could be downgraded
if there is a significant and permanent deterioration in the volume or
profitability of the company's individual medical business or small group
employee benefits businesses, due to health care reform, resulting
in ROCs consistently below 4%; or if the combined statutory
NAIC RBC ratio at the rated life insurance companies falls below 275%
of the company action level.
Given the negative outlook, an upgrade is unlikely. However,
the following factors could return the outlook on Assurant L&H to
stable from negative: implementation of the new 80% MLR and
other healthcare reform requirements without deterioration of Assurant
L&H's individual medical or employee benefits businesses (i.e.,
less than a 5% decline in revenues; or ROC of 6% or
greater, on a consistent basis.
PROPERTY & CASUALTY OPERATIONS
The affirmation of the A2 IFS ratings of the lead operating subsidiaries
of the Assurant P&C Group are based on a strong market position in
a number of niche, specialty P&C insurance markets, such
as lender-placed dwelling insurance, credit insurance/protection,
and extended service contracts/warranties. Other credit strengths
include good product and geographic diversification as well as relatively
strong profitability. Somewhat offsetting these strengths are the
group's overall modest scale, and a substantial level of catastrophe
exposure in its homeowners' line, particularly as a result of strong
growth in the business over the last several years. In addition,
certain lines of business such as the company's extended service contracts/warranties
and credit protection face headwinds as a result of a weak global economy.
The stable outlook on Assurant P&C reflects the differing business
dynamics of the P&C segment such that difficulties at the affiliated
life operation due to healthcare reform would be unlikely to lead to adverse
affects on the P&C side.
Factors that could lead to an upgrade of the groups P&C subsidiaries
include: significantly reduced catastrophe exposure, combined
with continued strong earnings (return on surplus above 10%).
Conversely, the P&C subsidiary ratings could be lowered if there
is a further increase in both gross and net catastrophe exposure,
a deterioration in profitability (return on surplus in the low single
digits), or increases in underwriting leverage (i.e.
gross underrating leverage above 5x). In addition, the ratings
of both the P&C group and the L&H Group assume debt-to-capital
remains in the 20% to 30% range.
The outlook for Assurant, Inc. was changed to negative due
to concerns at Assurant L&H. Mr. Bauer said, "Given
the operational uncertainty at the life subsidiaries, we consider
the P&C group, which has had strong results in recent years,
to be the primary supporter of Assurant's debt obligations over the medium
term." Assurant's existing ratings assume continued strong
parent company liquidity, including cash held directly at the holding
company, given that additional capital may be required at the company's
operating subsidiaries in a stress scenario, such as a significant
Assurant is a publicly-traded, diversified insurance operation
headquartered in New York, NY. For 2010, Assurant reported
total revenue of $8.5 billion and net income of $279
million. Shareholders' equity was $4.8 billion at
December 31, 2010.
The principal methodologies used in rating Assurant Inc. were Moody's
Global Rating Methodology for Property and Casualty Insurers published
in May 2010, and Moody's Global Rating Methodology for Life Insurers
published in May 2010.
Please see the ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service
MD - Insurance
Financial Institutions Group
Moody's Investors Service
Moody's Investors Service
Moody's changes Assurant Inc.'s outlook to negative
250 Greenwich Street
New York, NY 10007
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com
under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.
Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.