Fitch Ratings says it will not change the four 'AAA' rated U.S.
insurance companies' Rating Outlooks to Negative from Stable following
Monday's revision of the U.S. government's 'AAA' sovereign Rating
Outlook to Negative from Stable.
New York Life Insurance Company, Northwestern Mutual Life Insurance Co.,
Teachers Insurance and Annuity Association of America, and United
Services Automobile Association top-notch 'AAA' insurer financial
strength ratings are neither directly nor indirectly linked to
government support and therefore are not capped at the rating of the
U.S. government. Accordingly, the Rating Outlooks for all four groups of
companies remain stable.
Fitch maintains its view that each company demonstrates strong levels of
capital, liquidity, and franchise value independent of government
support. Therefore each group's ratings and outlooks remain intact
despite the U.S. sovereign Rating Outlook action. Furthermore, in the
event of a future U.S. sovereign downgrade, we believe it would be
reasonable for the four 'AAA' companies to maintain ratings potentially
one to two notches higher than the U.S. government's rating.
Ratings actions for the noted U.S. insurers linked to a possible future
U.S. sovereign downgrade would occur only if ramifications from a
sovereign rating event had widespread negative implications across
capital markets and/or if a more severe downturn in the economy were to
transpire.
The above article originally appeared as a post on the Fitch Wire credit
market commentary page. The original article can be accessed at
www.fitchratings.com.
All opinions expressed are those of Fitch Ratings.
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IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE
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