Posted on 11 Feb 2010
In the wake of reports that MetLife Inc. is in discussions with American International Group, Inc. (AIG) to purchase its American Life Insurance Company (ALICO) unit, A.M. Best Co. has placed ALICO's financial strength rating of A (Excellent) and issuer credit rating of "A" under review with positive implications.
While AIG and MetLife have yet to reach a definitive agreement, A.M. Best views this potential transaction favorably as it would result in a stable, well known and higher rated insurance organization's ownership of ALICO.
Late last year, ALICO was placed in a special purpose vehicle, in conjunction with the Federal Reserve Bank of New York, for the purpose of an initial public offering or third party sale. A sale to MetLife would be consistent with this strategy.
A.M. Best says ALICO maintains diverse product offerings on a globalized platform and retains a sizeable market share in many of the international markets it serves, including Japan. Furthermore, A.M. Best believes that ALICO's distribution partners would be receptive to a new highly rated parent, such as MetLife.
All ratings will continue to be under review pending A.M. Best's meetings with management to gain more clarity regarding this potential sale, as well as the execution strategy and overall impact in the event the deal falls through.