A.M. Best Co. said Monday that it had upgraded the financial strength rating of Allmerica Financial Life Insurance and Annuity Co. to A-minus, from B-plus, and the issuer credit rating to a-minus, from bbb-minus.
The Worcester, Mass., company's ratings were removed from review and assigned a stable outlook, according to the Oldwick, N.J., ratings agency.
Goldman Sachs Group Inc. bought the life and annuity lines of Allmerica Financial Corp. last year. Allmerica had placed the business in runoff in 2002 after a 1990s gamble on guaranteed minimum death benefits ran afoul of the collapse in equity prices early this decade. A.M. Best said its rating action was based both on the divested company's strong capitalization and on the scale gained by its recent acquisition of a significant block of variable annuity business. Goldman itself is a source of strength, Best said.
Offsetting rating factors include uncertainty regarding the success of the new long-term business strategy - actively reinsuring variable and fixed annuities - the ratings agency said.
