AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” (Excellent) of the members of Athene Group.

Athene is the consolidation of the affiliated reinsurance companies domiciled in Bermuda, and the organisation’s US operating companies.

Additionally, AM Best has revised the outlooks to positive from stable, and affirmed the Long-Term ICR of “bbb+” (Good), the Long-Term Issue Credit Ratings and the indicative Long-Term IRs of Athene Holding Ltd (Bermuda).

Athene Holding Ltd operates as the holding company for the Bermuda and US operations.

The ratings reflect Athene’s balance-sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management.

The positive outlooks reflect a continuing trend of Athene’s improving balance sheet strength.

AM Best views Athene’s consolidated risk-adjusted capitalisation as strongest, as measured by Best’s Capital Adequacy Ratio, and supported by favourable financial flexibility.

Athene has demonstrated its ability to access capital markets and maintains additional access to capital and liquidity through a revolving credit facility, Federal Home Loan Bank borrowing capacity, and a shelf registration statement, as well as uncalled capital commitments from Athene Co-Invest Reinsurance Affiliates investors.

The 2022 merger with Apollo Global Management, Inc. is expected to have a longer-term positive impact on Athene’s financial flexibility.

Financial leverage metrics were slightly higher than last year. AM Best notes that Athene holds elevated allocations to more complex and less liquid investments, which could be impacted materially under adverse market conditions, though default in its investment portfolio has been low to date.

Athene has a track record of consistently positive earnings driven by favourable earning spreads and operating profitability, despite the challenges related to competitive pressures.

Athene’s favourable business profile reflects continued enhancements through additional distribution channels in its retail markets, and expansion of its pension risk transfer business in the United States and Britain, its increased issuances of funding agreements and of its flow reinsurance channel in Japan in recent years.

The company has decreased the portion of liabilities with living benefits over the past several years.

Furthermore, the ACRA structures, and the recent PRT deals are expected to be accretive to earnings and available capital.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with revised outlooks to positive from stable for various members of the Athene Group.