AM Best Reviews Banner Life, William Penn-NY Ratings Amid Meiji Yasuda Acquisition

AM Best has kept the Financial Strength Rating of A+ (Superior) and Long-Term Issuer Credit Ratings of "aa-" (Superior) for Banner Life Insurance Company (BLIC) and William Penn Life Insurance Company of New York (William Penn-NY) under review with developing implications. Both companies maintain very strong balance sheets, strong operating performance, favorable business profiles, and appropriate enterprise risk management practices, supporting their robust credit ratings.

This rating action coincides with Legal & General Group Plc's (L&G) agreement to sell its U.S. protection business to Meiji Yasuda Life Insurance Company (Meiji) for $2.3 billion, expected to close by the end of 2025. The transaction includes BLIC and William Penn-NY, subsidiaries primarily involved in term life insurance and pension risk transfer (PRT) transactions.

L&G and Meiji have also formed a strategic partnership aimed at expanding Meiji's footprint in the U.S. pension risk transfer market. Under this agreement, Meiji will acquire a 20% stake in L&G's U.S. PRT business, while L&G retains 80% ownership through reinsurance arrangements and asset management roles.

The integration of BLIC and William Penn-NY into Meiji's U.S. operations will be closely monitored by AM Best as the transaction progresses. This move represents part of Meiji's broader international growth strategy focused on expanding in the U.S. life insurance sector.

The ongoing review of credit ratings reflects the importance of this transaction and potential future developments. AM Best continues to evaluate the risk management, financial strength, and operating performance of these entities in the context of ownership changes and market strategy shifts.

AM Best’s global credit rating expertise underscores the significance of maintaining strong balance sheets and operational efficiency amidst strategic business transitions within the highly regulated U.S. insurance industry. Market participants and industry observers should track this evolving transaction for its implications on pension risk transfer and life insurance market dynamics in the U.S.