AM Best Revises Outlooks to Positive for Assurant, Inc. and Its Property/Casualty Subsidiaries; Upgrades Credit Ratings of Its Life/Health Subsidiaries

AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long Term ICR) of “a+” (Excellent) of the U.S. property/casualty (P/C) subsidiaries of Assurant, Inc. (Assurant) (headquartered in New York, NY) [NYSE: AIZ]. These companies are collectively referred to as Assurant P&C Group (Assurant P&C). At the same time, AM Best has revised the outlook to positive and affirmed the Long-Term ICR of “bbb+” (Good) and all associated Long-Term Issue Credit Ratings (Long-Term IRs) and indicative Long-Term IRs of Assurant. AM Best also has affirmed the Short-Term IR. (See below for a detailed list of the companies and Long- and Short-Term IRs.)

Concurrently, AM Best has upgraded the FSR to A (Excellent) from A- (Excellent) and the Long-Term ICRs to “a” (Excellent) from “a-” (Excellent) of Assurant’s credit and life/health (L/H) subsidiaries: American Bankers Life Assurant Company of Florida (Miami, FL) and Caribbean American Life Assurance Company (San Juan, PR). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Assurant P&C’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The revision of the outlooks to positive for Assurant P&C reflects AM Best’s expectation that the group’s operating fundamentals and future capital generation should remain favorable over the intermediate term. The group’s ability to generate strong earnings and cash flow through operations on a pre-dividend basis, along with having a strong parent, Assurant, are considered in the revised outlooks. While these points are important, the revised outlooks are tied mainly to how these earnings translate into better-than-average capital formation at the group level, and at the parent (on a consolidated basis). Although the risk-adjusted capital level at the group is not expected to change, the improved assessment of the group’s balance sheet strength is derived largely from the group’s earnings power and limited variability.

AM Best assesses Assurant’s balance sheet strength at very strong, supported by risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), at the strongest level, overall stable reserves and very strong earnings generating capabilities, a majority of which is derived from low-risk businesses such as fee for service products that include most business in the Global Lifestyle segment. Assurant’s property catastrophe exposure, which stems mostly from its lender placed homeowners book in Global Housing, is well-managed, has adequate reinsurance protection, and its share of the total revenue and profits has decreased steadily compared with considerable growth achieved in the Global Lifestyle segment.

The ratings of Assurant’s credit L/H insurance companies, American Bankers Life Assurance Company of Florida and Caribbean American Life Assurance Company, reflect their balance sheet strength, which AM Best assesses as strong, as well as their strong operating performance, limited business profile and appropriate ERM.

The rating upgrades reflect the importance of the Assurant Lifestyle L&H Group entities to serve as Assurant’s fully licensed life, accident, and health insurance company for credit insurance and related business despite being a small piece of overall Assurant business and premiums written. The entities receive implicit support, and are integrated fully into the organization’s operations and strategic plans. The credit insurance business adds to overall product diversity for Assurant.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with the outlooks revised to positive from stable for the following P/C subsidiaries of Assurant, Inc.:

• American Bankers Insurance Company of Florida
• American Security Insurance Company
• Standard Guaranty Insurance Company
• Caribbean American Property Insurance Company
• Voyager Indemnity Insurance Company
• Virginia Surety Company, Inc.
• Reliable Lloyds Insurance Company

The following Short-Term IR has been affirmed:

Assurant, Inc.—

-- AMB-1 (Outstanding) on commercial paper

The following Long-Term IRs have been affirmed, with the outlooks revised to positive from stable:

Assurant, Inc.—

-- “bbb+” (Good) on USD 300 million 4.90% senior unsecured bonds, due 2028

-- “bbb+” (Good) on USD 300 million 4.20% senior unsecured bonds, due 2023 (USD 225 million outstanding)

-- “bbb+” (Good) on USD 350 million 3.70% senior unsecured bonds, due 2030

-- “bbb+” (Good) on USD 475 million 6.75% senior unsecured bonds, due 2034 (USD 275 million outstanding)

-- “bbb” (Good) on USD 400 million 7.00% subordinated bonds, due 2048

-- “bbb” (Good) on USD 250 million 5.25% subordinated bonds, due 2061

The following indicative Long-Term IRs on securities available under the shelf registration have been affirmed, with the outlooks revised to positive from stable:

Assurant, Inc.—

-- “bbb+” (Good) on senior unsecured

-- “bbb” (Good) on subordinated debt

-- “bbb-” (Good) on preferred stock

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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