KBRA upgrades ratings and assigns a positive outlook for Nassau Financial Group

Credit rating agency KBRA has upgraded the Insurance Financial Strength Rating (IFSR) to BBB+ and assigns a positive outlook for Nassau Life Insurance Company (NNY), Nassau Life and Annuity Company (NLA), Nassau Life Insurance Company of Kansas (NKS), and Nassau Re (Cayman) Ltd. (NKY), which are indirect subsidiaries of Nassau Financial Group, L.P. (NFG).

Simultaneously, KBRA also upgrades and publishes its BB+ issuer rating on NFG and its B+ debt rating on NFG’s Class C non-voting redeemable perpetual preferred stock, and assigned a positive outlook as well.

According to KBRA, Nassau’s ratings reflect its multi-year transformation through successful strategy execution, a holding company structure that provides capital raising and financial flexibility benefits.

The firm’s operational and distribution strengths along with mature profitable closed block, and robust ERM policies, procedures and practices are also factors in the ratings change.

These strengths are balanced by underlying drivers of profitability which, while strong, have been negatively impacted by some recent adverse mortality experiences, explained KBRA

However, while Nassau’s statutory capital profile is strong, certain capital ratios, including CAL RBC ratios, remain below industry benchmarks. A relatively high proportion of NNY’s surplus base is composed of surplus notes.

It should be noted that while the marketplace for fixed and fixed-indexed annuities is large, it is also highly competitive, with many players, some of which are larger, have greater resources, and benefit from well-known brand names.

KBRA will continue to monitor the company’s market performance for potential upgrades or downgrades of the assigned ratings.

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