A.M. Best Removes Ratings of MONY Life Insurance Company From Under Review
OLDWICK, N.J. -- October 2, 2013
A.M. Best Co. has removed from under review with negative implications and
affirmed the financial strength rating of A+ (Superior) and issuer credit
rating of “aa-” of MONY Life Insurance Company (MONY) (Syracuse, NY). The
outlook assigned to both ratings is stable.
The ratings were placed under review in April 2013, following the announcement
that Protective Life Insurance Company, a direct subsidiary of Protective
Life Corporation (Protective) (headquartered in Birmingham, AL)(NYSE:PL) was
acquiring MONY from certain subsidiaries of AXA S.A. (France). The transaction
closed on October 1, 2013. MONY consists primarily of a closed book of life
insurance business, and it no longer markets new policies.
A.M. Best notes that the MONY acquisition is consistent with Protective’s
business model of complementing organic growth with select acquisitions.
Protective has a long history of successfully acquiring and integrating blocks
of business, and A.M. Best expects MONY to remain well capitalized throughout
its managed run off.
The all-cash deal represents an aggregate purchase price of approximately
$1.06 billion and includes the stock purchase of MONY and the coinsurance of
part of the book of business of its former affiliate, MONY Life Insurance
Company of America. Protective will utilize only a modest amount of debt to
fund the purchase, maintaining its financial leverage in the 30% range
(incorporating some equity credit for existing hybrids). The majority of the
financing will be sourced from excess capital, supplemented by a Regulation
XXX reserve financing of business unrelated to MONY. Although Protective’s
risk-adjusted capital ratios are expected to decline, A.M. Best believes the
transaction itself will not have a significant impact on the long-term
financial strength of the organization.
A.M. Best believes MONY is well positioned at its current rating level.
Negative rating actions could result from a material decline in MONY’s
risk-adjusted capitalization or a decline in its overall strategic importance
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
A.M. Best Company is the world's oldest and most authoritative insurance
rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.
Michael Adams, 908-439-2200, ext. 5133
Senior Financial Analyst
Ken Johnson, CFA, 908-439-2200, ext. 5056
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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