Fitch Ratings Upgrades Pacific Life from A+ to AA-
As of June 26, 2019, Fitch Ratings announced it has upgraded the financial strength ratings for Pacific Life Insurance Company, Pacific Life & Annuity Company, and Pacific Life Re Ltd. to AA- from A+. The AA- rating is the fourth highest rating out of 21 rating categories used by Fitch.
Pacific Life’s ratings are based on the company’s diverse business profile, extremely strong statutory capitalization and strong earnings, investment management and liquidity. Somewhat offsetting these positives are the company’s high total financing and commitments (TFC) ratio and above average, but declining exposure to legacy VA business.
Pacific Life has diversified its product portfolio by further reducing its exposure to legacy VAs with more feature-rich riders and increasing its emphasis on fixed annuities (FA), investment-only VAs, indexed universal life (IUL) products, life reinsurance, structured settlements and pension risk transfers. Business diversification is further enhanced by its aircraft leasing subsidiary, Aviation Capital Group (ACG), and its reinsurance division, Pacific Life Re.
This action by Fitch to upgrade Pacific Life’s financial strength rating to AA- is based on their long-term review of the company’s financial results
-Pacific Life, CFO
Fitch views Pacific Life’s capitalization as extremely strong based on its RBC ratio of 552% at year-end 2018 and Prism capital model score of ‘Extremely Strong’ when last calculated at year-end 2017. The company’s total adjusted capital (TAC) was $10.7 billion at Dec. 31, 2018. This represents a five-year compound annual growth rate (CAGR) of 8.6%, driven primarily by retained earnings and unrealized capital gains. Operating leverage and financial leverage remained very strong at 7x and 15%, respectively, as of Dec. 31, 2018.
View the full press release from Fitch Ratings here or view the press release from Pacific Life here. For questions or to learn how to incorporate Pacific Life in your next clients portfolio call CreativeOne at 800.992.2642