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Fitch Affirms Symetra Life's IFS at 'A' and Holdco's IDR at 'A-'; Outlook Stable
May 2, 2017 / 2:18 PM / 7 months ago

Fitch Affirms Symetra Life's IFS at 'A' and Holdco's IDR at 'A-'; Outlook Stable

(The following statement was released by the rating agency) NEW YORK, May 02 (Fitch) Fitch Ratings has affirmed Symetra Life Insurance Company's (Symetra Life) Insurer Financial Strength (IFS) rating at 'A'. Fitch has also affirmed the Issuer Default Rating (IDR) of Symetra Financial Corporation (Symetra) at 'A-' and the ratings of all outstanding debt. The Rating Outlook is Stable. A complete list of rating actions follows at the end of this release. KEY RATING DRIVERS The affirmation follows the revision of the Rating Outlook for Symetra's parent, Sumitomo Life Insurance Company's (Sumitomo), to Stable from Negative as a result of the revision of the Japanese sovereign Outlook to Stable from Negative (see 'Fitch Revises Outlook on Japan to Stable; Affirms at 'A'', dated April 27, 2017 at Symetra's Outlook, which remains Stable, reflects that if the Japanese sovereign rating were to have been downgraded by one notch, Fitch likely would have affirmed its ratings, due to Symetra's lack of direct exposure to Japan and the issues that had constrained the country's sovereign rating. Based on Fitch's criteria, Symetra's strategic importance level is 'Very Important' within the Sumitomo enterprise, reflecting its position as its parent's U.S. platform. This, along with its standalone credit profile, which Fitch views as in line with an 'A' IFS rating, results in Symetra Life carrying the same IFS rating as Sumitomo. Sumitomo's IFS rating of 'A' remains constrained by the Japanese sovereign and is one notch below its unadjusted IFS rating of 'A+'. Symetra's ratings reflect its strong balance sheet, diversified earnings and moderate financial leverage. Additional strengths include the company's strong competitive position in the group medical stop-loss market and fixed annuities sold through banks. The standalone credit profile also considers Symetra's exposure to the protracted low interest rate environment. Fitch believes that with its liability mix, particularly its large legacy structured settlement and bank owned life insurance book, Symetra is more exposed to interest rate risk than peers. RATING SENSITIVITIES Symetra Life's IFS rating could be upgraded one notch above Sumitomo's IFS rating if its standalone credit profile improved to 'A+'. As a 'Very Important' subsidiary of Sumitomo, Symetra Life's IFS rating could also be upgraded in conjunction with an upgrade of the parent. In the event of a one notch downgrade of the parent's IFS rating to 'A-', Symetra Life could maintain its current 'A' IFS rating per Fitch's criteria. As a 'Very Important' subsidiary of Sumitomo, Symetra Life's IFS rating could be downgraded below the parent's IFS rating if its standalone assessment is downgraded by three or more notches. Symetra's holding company ratings are somewhat constrained by Sumitomo's ratings, which are capped by Japan's Long-Term Local-Currency IDR of 'A'. Therefore, a two notch upgrade of Sumitomo's IFS rating would be needed to upgrade Symetra's holding company ratings. Conversely, if Sumitomo's ratings were downgraded by more than one notch, based on its own credit quality, or deterioration in Japan's sovereign rating, Symetra's holding company ratings would also likely be lowered in conjunction with its parent. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings with a Stable Outlook: Symetra Financial Corp. --IDR at 'A-'; --4.25% senior unsecured notes due July 15, 2024 at 'BBB+'; --8.3% junior subordinated CENts due Oct. 15, 2067 at 'BBB-'. Symetra Life Insurance Company --IFS at 'A'. First Symetra National Life Insurance Company of New York --IFS at 'A'. Contact: Primary Analyst Jamie R. Tucker, CPA Associate Director +1-212-612-7856 Fitch Ratings, Inc. 33 Whitehall Street New York, NY 10004 Secondary Analyst Julie A. Burke, CPA, CFA Managing Director +1-312-368-3158 Committee Chairperson Keith M. Buckley, CFA Managing Director +1-312-368-3211 Media Relations: Hannah James, New York, Tel: + 1 646 582 4947, Email: Additional information is available on Applicable Criteria Insurance Rating Methodology (pub. 26 Apr 2017) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. 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