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Nationwide's Best Annuities Help Affirm Ratings

In a press release from A.M. Best Company, they affirmed Nationwide’s financial strength ratings of A+ and aa-.  In “A.M. Best Affirms Ratings of Nationwide Financial Services, Inc. and Its subsidiaries; Outlook Negative,” the ratings are summarized.  Nationwide Financial Services, Inc., owned by Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company, and its subsidiaries operate out of Columbus, Ohio.  Subsidiaries Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company had affirmed financial strength ratings of A+ (Superior) and issuer credit ratings of aa-, partially due to sales of their best annuities.  The parent company’s issuer credit rating of “a-” and all of its debt ratings were also affirmed.  According to A.M. Best, the outlook is negative for all of Nationwide’s ratings.

Nationwide’s business profile is diverse with many product lines, has wide-ranging brand recognition and a leading position in the market of public retirement plans.  Their net flows in retirement and individual annuities are stable and improving.  Their financial leverage is within the guidelines judged by A.M. Best.  Some factors offsetting the ratings include a large exposure to mortgages, mortgage-backed securities and bonds that are below investment grade.  While there are still moderate levels of impairments going forward due to these factors and an industry hit hard with the economy, they have been able to combat the impairments with a decline in individual annuity outflows, mainly due to variable annuities, and good net flows in the public 457 retirement market.

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