American Heritage Life credit ratings placed under review with Allstate deal in place

AM Best has placed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa-” (Superior) for American Heritage Life Insurance Company (American Heritage), based in Jacksonville, Fla., under review with negative implications.

This rating action follows the announcement on Aug. 13 that StanCorp Financial Group, Inc. (StanCorp) and The Allstate Corporation have reached a definitive agreement for StanCorp to acquire Allstate’s employer voluntary benefits business.

The ratings of American Heritage have been placed under review with negative implications pending the completion of the sale, which is subject to regulatory approval.

Upon finalization of the acquisition, there is a potential for a downgrade in American Heritage’s ratings, possibly by one notch for both its FSR and Long-Term ICR.

This potential downgrade is due to American Heritage no longer being part of the Allstate group and the current lower ratings held by StanCorp. The negative implications are not a reflection of a change in the creditworthiness of American Heritage itself.

The ratings will remain under review until the transaction is finalized, which is anticipated to occur in the first half of 2025.

It was earlier this month when giant insurer Allstate announced the mega deal, with plans also underway to divest its individual and group health sectors.

The company noted that this is part of a broader strategy to focus more intensely on its core personal liability and protection services.

Originally, Allstate sought a single buyer but shifted strategy after market evaluation suggested more beneficial separate sales.

The transaction will see over 3.8 million customers of Allstate’s employer voluntary benefits continuing their services under Standard, which is StanCorp Financial’s brand. Moreover, Allstate agents will start offering a wider range of options to their clients through a five-year exclusive distribution deal with Standard.

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