James River Insurance Company Update

On May 7, 2021 AM Best downgraded the financial strength rating of the James River Group Holdings, Ltd. insurance subsidiaries (including James River Insurance Company; JRIC)) to an “A-” (4th highest) from an “A” (3rd highest). This rating action followed AM Best’s decision to revise the group’s rating outlook from stable to negative in early March 2021.

Tower Hill Prime – A- Rating Questioned

ALIRT has always been a bit confused by Tower Hill Prime’s (THP) A- rating by AM Best, which was reissued in 2015. In 2004, the company received its first A- rating which was subsequently downgraded and removed in 2009. We note that THP’s rating was downgraded to B++ in December 2020 before being lowered again to B+ last week, with a negative outlook. It seems like history is repeating itself.

Mortality for the Life Insurance Industry in 2020

The Covid-19 pandemic significantly impacted the U.S. life insurance industry in 2020. The emergence of the
virus in late winter 2020 greatly limited economic and social activities in almost every quadrant of the country,
and virtually every government (state, federal, local) in the U.S. and other western countries took significant
actions to attempt to limit the spread of the virus.

Genworth Financial Inc. Terminates Merger Agreement with China Oceanwide

On April 6, 2021 Genworth Financial Inc. (GNW) exercised its right to terminate its merger agreement with China Oceanwide Holdings Group Co. Ltd. (CO). This ends a nearly 4½ year process, characterized by 17 extensions, the receipt of numerous regulatory approvals in the U.S., and the sale of GNW’s ownership interest in its Canadian mortgage insurance business.

China Oceanwide Acquisition of Genworth Update

Genworth Financial Inc. (GNW) and China Oceanwide Holdings Group Co. Ltd. (CO) announced on January 4, 2021 that they would not extend the “end date” under their merger agreement. This is a change from the seventeen previous extensions the two companies have agreed upon since their original agreement to merge in 2016.

TransAmerica To Exit Select Lines of Business

On December 10, 2020 AEGON N.V. (AEG), parent company of the TransAmerica U.S. life insurers (TRANS), announced significant changes to its U.S. individual businesses in an effort to strengthen the business, provide capital relief, and create value for AEG’s customers and shareholders.  These changes include the following:

Great American Life to Cede a Portion of its Annuity Business

On October 26, 2020, Great American Life Insurance Company (Great American Life), the principal life insurer of the publicly traded American Financial Group, Inc. (AFG), announced it had reached an agreement to cede $5.7 billion of fixed and fixed indexed annuities to Commonwealth Annuity & Life Insurance Company (CA&L), a life insurer owned by the privately held Global Atlantic Financial Group Ltd. (Global Atlantic). The transaction is retroactive to October 1, 2020.