AM Best Downgrades Credit Ratings of Stellar National Life Insurance Company; Places Credit Ratings Under Review With Developing Implications
September 13 2024 - 11:53AM
Business Wire
AM Best has downgraded the Financial Strength Rating to
B+ (Good) from B++ (Good) and the Long-Term Issuer Credit Rating to
“bbb-” (Good) from “bbb” (Good) of Stellar National Life Insurance
Company (Stellar) (Phoenix, AZ). Concurrently, AM Best has placed
the Credit Ratings (ratings) under review with developing
implications.
The ratings reflect Stellar’s balance sheet strength, which AM
Best assesses as adequate, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management.
These rating actions are due to Stellar’s capital and surplus,
which declined to $4.0 million at second quarter 2024, from $9.6
million at year-end 2023. The decline in capital and surplus is
driven by losses related to launching production, new business
strain and startup costs. The company is planning to improve its
capital position through strategic discussions as it seeks new
capital partners. The ratings will remain under review with
developing implications while AM Best monitors the status of
capital initiatives and fully reviews the impact.
Stellar has focused on becoming a fully digital issuer of
annuities, while partnering with U.S. independent annuity sales
channels. Invested assets are managed by Stellar National IM, LLC
(Stellar IM), an affiliate of Stellar’s parent company, Stellar
National Holdings, LLC (Stellar Holdings). Stellar IM has a
strategic investment relationship with Blue Vista Capital
Management, LLC, an indirect owner of Stellar Holdings, which has a
particular expertise in the commercial mortgage lending space and
over $5 billion in assets under management. Partially offsetting
factors include the increasing exposure to interest rate risk as
Stellar’s annuity book of business grows, as well as the challenges
that come with executing its business plan.
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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Michael Lynch Financial Analyst +1 908 882
2077 michael.lynch@ambest.com Christopher Sharkey
Associate Director, Public Relations +1 908 882 2310
christopher.sharkey@ambest.com Edward Kohlberg
Director +1 908 882 1979 edward.kohlberg@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com