The Bermuda life reinsurer owned by the investment arm of one the largest pension funds in the world has maintained its strong credit ratings in the latest review.

Fitch Ratings has affirmed Wilton Re's long-term issuer default rating at 'BBB+' and the insurer financial strength rating of its US and Bermuda operating companies (collectively, Wilton Re) at 'A'.

Wilton Re is owned by the Canada Pension Plan Investment Board.

The rating outlooks are stable. Additionally, Fitch has maintained the rating watch negative on ivari's IFS rating (A-).

Wilton Reinsurance Bermuda is a part of the Wilton Re group of companies, which specialises in the acquisition of in force life insurance and annuities.

The Class E licensed Bermuda reinsurer is focused on the North American life insurance market, providing risk capital and related services, including M&A and in force acquisitions, traditional reinsurance and longevity risk management.

Wilton Re's ratings are one notch higher than Fitch's view of its stand-alone credit quality, due to its ownership by CPP Investments.

The uplift recognises Wilton Re as a non-core subsidiary, but important investment platform for CPP Investments. Fitch does not rate CPP, but believes to be of the highest credit quality based on its scale and importance in supporting the Canada Pension Plan.

While CPP has demonstrated a willingness to support Wilton Re's growth and contributed capital over the years, in recent years, capital has been directed upstream, given Wilton Re's excess capital position compared with its target.

With strong capitalisation and a strong earnings profile, the Bermuda solvency capital requirement ratios for Wilton Re's Bermuda subsidiaries remain well in excess of their targets and continue to remit capital to the parent.

In August 2022, Wilton Re announced an agreement to sell ivari to Sagicor Financial Company. Consequently, ivari's ratings reflect its stand-alone credit quality, with ownership uplift no longer applicable.

ivari is a national network of thousands of independent advisers in Canada, providing a full range of insurance products, including permanent and temporary insurance solutions and critical illness coverage.

The sale is viewed as neutral to Wilton Re's ratings. However, Fitch said it would materially reduce its shareholders' equity, adversely affecting its financial leverage, which is partially offset by an expectation of improved earnings metrics and enhanced stability following the sale.

ivari was materially negatively affected by the implementation of IFRS 17, with capital contributed to maintain the LICAT above target levels.

In resolving ivari's negative rating watch, Fitch will focus on the impact of the announced transaction on ivari's credit profile, as well as Sagicor's financial strength and strategic plans for the entity.

ivari's financial strength is currently viewed as stronger than that of its new parent.