AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) of the key life/health insurance and annuity operating subsidiaries of Wilton Re Ltd. (WRL) (Nova Scotia, Canada), collectively referred to as Wilton Re. AM Best also has affirmed the Long-Term ICR of “a-” (Excellent) of WRL. The outlook of these Credit Rating (ratings) is stable. (See below for a detailed listing of these companies and ratings).

The ratings reflect Wilton Re’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. The ratings also reflect implicit support from the ultimate parent company, Canada Pension Plan Investments Board (CPP Investments).

The rating affirmations reflect a continuation of Wilton Re’s very strong level of risk-adjusted capitalization on a consolidated GAAP basis, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as strong capitalization among its U.S. statutory entities. Wilton Re has a track record of maintaining good financial flexibility through access to additional liquidity sources, including a bank credit facility, Federal Home Loan Bank membership, an external subordinated note, and an internal surplus note. The organization also has additional flexibility through its highly rated ultimate parent, CPP Investments. Wilton Re utilizes a variety of external investment managers to provide further expertise in the management of a more diversified invested asset portfolio, which has supported a trend of strong investment income and overall operating earnings.

Partially offsetting these positive rating factors is Wilton Re’s dependence on inbound block reinsurance deals; however, the group is selective through its use of risk management. Risk is moderated by the experienced management team maintaining strong relationships with counterparties. The group has gradually increased its allocation to private credit and real estate investments, and some structured securities, which presents some potential liquidity risk in stressed scenarios. This is managed by Wilton Re maintaining liquidity coverage ratios that are within tolerance for the current rating levels, across various time horizons, interest rate, default and equity return shocks. The group’s efficient capital management strategies have also been used to manage its financial leverage, which remains slightly below Wilton Re’s target.

A negative rating action could occur if there is a sustained decline in Wilton Re’s overall operating performance or balance sheet metrics, including risk-adjusted capitalization and quality of capital.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) have been affirmed with stable outlooks for the following life/health subsidiaries of Wilton Re:

• Wilton Reinsurance Bermuda Limited
• Wilton Reassurance Company
• Texas Life Insurance Company
• Wilton Reassurance Life Company of New York
• Wilcac Life Insurance Company

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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