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A.M. Best Co. has commented that the financial strength, issuer credit and debt ratings of Massachusetts Mutual Life Insurance Company (MassMutual) (Springfield, MA) and its subsidiaries are unchanged. The outlook for all ratings is stable.
The comment follows MassMutual’s recent announcement of a definitive agreement with The Hartford Financial Services Group, Inc. (The Hartford) (Hartford, CT) [NYSE: HIG] to purchase its retirement plans business for $400 million, subject to a closing adjustment.
A.M. Best views the acquisition favorably as it brings additional scale to MassMutual’s existing retirement business, especially in the small-to mid-sized case market. The Hartford retirement plans business—when combined with MassMutual—will result in $120 billion in retirement assets under management and will serve over 3 million participants. The transaction is expected to be funded internally. Given the size of the transaction, it is not expected to materially impact MassMutual’s strong risk-adjusted capitalization ratios. Following some integration and infrastructure expenses, the acquired business is expected to be accretive to earnings beginning in the second year after its acquisition.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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