New York Life gets its strengths reaffirmed

Our Banking Bureau
07 September 2002

New York: Even as the credit rating agency Standard & Poors (S&P) is downgrading ratings of several life insurers worldover, the New York-based New York Life Insurance Company got its financial strengths affirmed.

The affirmation comes despite the companys exposure to some of the most notable problem credits at the beginning of 2002. In the first six months of 2002, as a result of these credit issues and the decline in the equity markets, it suffered realised and unrealised losses of $625 million.

The company has been able to sustain these losses because of its diversification and extremely strong capital base, which even after such losses remained extremely strong as indicated by a risk-based capital ratio on S&Ps model of approximately 316 per cent.

A combination of several positive features extraordinary strong business position in individual life and annuities, growing track record of enhancing the productivity of its career agency force, continued improvement in individual sales, disciplined approach to asset and liability management and small but rapidly growing presence in the global markets satisfied S&P to affirm its double-A-plus counter-party credit and financial strength ratings on New York Life.

S&P also affirmed its ratings on life insurers affiliates with stable outlook. New York Life is one of the most respected names in the domestic life insurance business, says S&Ps credit analyst Thomas Upton.

The companys individual life and annuity sales were up 42 per cent and 6 per cent, respectively, in 2001 versus 2000, with the former resulting in about a 7 per cent market share nationally. In 2001, the company was the number one US life insurer based on new sales, as reported by Limra.