AM Best has upgraded the financial strength rating to A+ (Superior) from A (Excellent) and the long-term issuer credit rating to “aa-” (Superior) from “a+” (Excellent) of the members of Athene Group, the consolidation of the organisation’s US operating companies, along with its affiliated reinsurance companies domiciled in Bermuda.

In addition, AM Best has upgraded the long-term ICR to “a-” (Excellent) from “bbb+” (Good) of Athene Holding Ltd of Delaware, which operates as the holding company for the US and Bermuda operations.

Concurrently, AM Best has upgraded the long-term issue credit ratings and the indicative long-term IRs of Athene Holding Ltd.

The outlook of these credit ratings has been revised to stable from positive.

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 rating upgrades 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, supported by favourable financial flexibility, including significant excess liquidity.

The ratings agency said: “Athene has demonstrated its ability to access capital markets and maintains additional access to capital and liquidity through a liquidity facility, 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, which has been beneficial to Athene’s financial position.

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

It added: “Financial leverage metrics support Athene’s current ratings. AM Best notes that Athene holds elevated allocations to 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.”

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

During this time, AM Best said, Athene has demonstrated restraint and pricing discipline. Furthermore, the ACRA structures, and the recent PRT deals are expected to be accretive to earnings and available capital.

The FSR has been upgraded to A+ (Superior) from A (Excellent) and the long-term ICRs to “aa-” (Superior) from “a+” (Excellent), with the outlooks revised to stable from positive for the following members of Athene Group: Athene Annuity & Life Assurance Company, Athene Annuity & Life Assurance Company of New York, Athene Annuity and Life Company, Athene Life Insurance Company of New York, Athene Life Re Ltd, Athene Life Re International Ltd, Athene Co-Invest Reinsurance Affiliate International Ltd, Athene Co-Invest Reinsurance Affiliate 1A Ltd, Athene Co-Invest Reinsurance Affiliate 1B Ltd, Athene Annuity Re Ltd, Athene Co-Invest Reinsurance Affiliate 2A Ltd, and Athene Co-Invest Reinsurance Affiliate 2B Ltd.