José S. Suquet
Chairman, President and CEO
I would like to share with you the good news that in recent days Fitch Ratings affirmed its "A" insurer financial strength rating for Pan-American Life Insurance Company and issued a "Stable" outlook for the company. This ratings action follows the affirmation issued in January by A.M. Best of our "A-" (Excellent) rating and "Positive" outlook for the company. The ratings are based on a rigorous quantitative review of Pan-American Life's capitalization, liquidity, financial flexibility and operating performance.
At a time when the ratings agencies have negative outlooks on the insurance industry as a whole and the economy is still short of a spirited recovery, these votes of confidence in the financial strength of Pan-American Life underscore the sound asset management strategies and operating practices our management team has undertaken to safeguard the financial interests of our policyholders while continuing to deliver business growth.
Fitch Ratings, which has most recently issued only two stable outlooks and no positive ones among the top 25 U.S. life insurance groups, noted in its report on Pan-American that "while Pan-American is not immune to the ongoing difficult economic environment, it is not exposed to key areas of concern for Fitch, particularly structured securities, variable annuity living benefits and short-term institutional lending."
Other excerpts from the Fitch report highlight that:
- "Fitch continues to view Pan-American's balance sheet as very strong."
- "Total risky assets, which include below-investment grade bonds (BIGs), unaffiliated common stock, troubled real estate and Schedule BA assets, in relation to statutory capital is materially below average."
- "Fitch considers Pan-American's risk-based capitalization to be very strong."
- "Pan-American's financial leverage continues to be in line with Fitch's expectations."
- "Operating profitability continues to improve and become more stable as management focuses on streamlining operations and addressing legacy issues."
In January, A.M. Best had concluded that following a thorough review of Pan-American's balance sheet strength, management team, operating performance and business profile, Pan-American Life earned an "A-"(Excellent) rating a "Positive" outlook, according that firm's established and objective standards.
In its report on Pan-American Life, A.M. Best noted that:
- "It's overall investment portfolio appears to be less risky relative to its insurance risk while the risk-based capitalization remains more than adequate in recent years."
- The positive impact of various operational cost containment programs and continuing execution of new business initiatives to address premium growth while sustaining statutory profitability from core business lines were drivers in the decision to affirm its rating.
While we are pleased that the ratings agencies continue to recognize the strength of our company and the soundness of our management approach, rest assured that we will continue to be vigilant of market trends and adjust our business strategies as conditions evolve.
Click here to read Fitch Ratings official press release.
José S. Suquet
Chairman of the Board, President and CEO
Pan-American Life Insurance Group