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Corps > Insurance > Flashcards

Insurance Flashcards

1
Q

CENTENE CORPORATION (CNC)

A

Major player in the healthcare sector, primarily serving government-sponsored and commercial healthcare programs. It is well-positioned due to its extensive reach and focus on under-insured and uninsured populations. Strengths include a strong market position and diversified revenue streams. Weaknesses involve high exposure to regulatory changes and operational risks associated with managing a large, diverse member base.

Ba1/BBB-(Neg)/BBB-
Health Insurance - Americas
$15.90bn in index across 7 issues

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2
Q

ELEVANCE HEALTH INC (ELV)

A

fka Anthem, offers a comprehensive range of health plans and services, including clinical, behavioral, pharmacy, and complex-care solutions. It differentiates itself through a focus on whole health and community-based care. Strengths include robust financial performance and a diversified service portfolio. Weaknesses are potential regulatory challenges and the complexity of managing a broad array of services.

Baa2(Pos)/A(Neg)/BBB+
Health Insurance - Americas
$24.53bn in index across 29 issues

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3
Q

HEALTH CARE SERVICE CORPORATION (HCSERV)

A

Customer-owned health insurer operating Blue Cross and Blue Shield plans in five states. It focuses on providing cost-effective care and community investments. Strengths include strong financial ratings and a focus on long-term stability. Weaknesses are geographical concentration and potential challenges in scaling operations.

A3(Neg)/A+(Neg)
Health Insurance - Americas
$4.00bn in index across 5 issues ($4.00bn 144a)

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4
Q

HIGHMARK INC (HIMARK)

A

Offers health insurance and related services, with a strong presence in Western Pennsylvania. It is known for its integrated healthcare delivery model and strategic partnerships. Strengths include solid financial performance and a diversified product mix. Weaknesses involve geographical concentration and competitive pressures in its primary market.

Baa2/A-
Health Insurance - Americas
$0.80bn in index across 2 issues ($0.80bn 144a)

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5
Q

HUMANA INC (HUM)

A

Specializes in Medicare Advantage plans and has a strong presence in the senior health market. It is known for its focus on integrated care and value-based healthcare. Strengths include a solid market position in Medicare Advantage and consistent financial performance. Weaknesses involve reliance on government funding and exposure to regulatory changes.

Baa2/BBB/BBB(Neg)
Health Insurance - Americas
$12.00bn in index across 18 issues

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6
Q

MOLINA HEALTHCARE INC (MOH)

A

Provides managed healthcare services under Medicaid and Medicare programs, focusing on low-income families and individuals. It stands out due to its targeted approach and efficient cost management. Strengths include strong growth in membership and disciplined cost control. Weaknesses are high dependence on government contracts and potential volatility in regulatory environments.

Ba2/BB
Health Insurance - Americas
$2.20bn in index across 3 issues

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7
Q

UNITEDHEALTH GROUP INC (UNH)

A

the largest health insurer in the U.S., offering a comprehensive range of healthcare products and services through its UnitedHealthcare and Optum segments. It is highly diversified and benefits from significant scale. Strengths include strong financial performance and extensive market reach. Weaknesses involve regulatory scrutiny and the complexity of managing a vast and diverse organization. Not committed to IG

A2/A+/A
Health Insurance - Americas
$73.98bn in index across 65 issues

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8
Q

AFLAC INCORPORATED (AFL)

A

Provides supplemental health and life insurance in the U.S. and Japan, known for its strong brand and innovative marketing. It is well-positioned due to its niche focus and strong market presence. Strengths include a robust financial position and consistent profitability. Weaknesses involve exposure to currency fluctuations and regulatory changes in its key markets. Third highest quality life insurance name

Upgrading to overweight to reflect ~10bp of decompression versus the IG life insurance index and 25y single-As over the last three months. We think spreads look attractive 5bp wide of ManuLife due to a lower risk investment portfolio and much lower (~27pts) debt-to-EV in the low-10% area. Valuations also look attractive only 5-10bp tight to REITs like SPG, which has a much higher (~20pts) debt-to-EV and a tenant base reliant, to a large extent, on discretionary retail. Recent decompression in spreads is overdone given a solid 2Q24 beat driven by higher net investment income and lower underwriting expenses. We think the investment portfolio should continue to benefit from reinvesting into higher yields in Japan. While this could put some pressure on capital levels of the Japan subsidiary, we think the company is well positioned to maintain debt-to-capital in the 20-25% range.

A3/A-
Life - Americas
$2.65bn in index across 5 issues

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9
Q

ATHENE HOLDING LTD (ATH)

A

A leading retirement services company with a focus on providing annuities and reinsurance solutions. It leverages its relationship with Apollo Global Management to enhance its investment capabilities. Strengths include a strong capital position and high-quality asset portfolio. Weaknesses include exposure to interest rate fluctuations and market risks.

Downgrading to an U/W recommendation on ATH because spread levels look tight trading only ~20 bps behind CRBG. We view CRBG as a higher quality US L&R credit owing to its low-risk and highly diversified liability profile, established distribution network, and consistent track record of distributing $2B of cash flow to the HoldCo each year. Additionally, CRBG screens as having lower investment risk given smaller exposure to more complex CLO/ABS assets (13% allocation vs. 20% for ATH), and we’d expect CRBG to hold up better in a downside scenario.

Baa1/A-/BBB+
Life - Americas
$16.26bn in index across 26 issues ($11.26bn 144a)

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10
Q

BRIGHTHOUSE FINANCIAL INC (BHF)

A

Specializes in annuities and life insurance, focusing on helping clients protect their financial futures. It benefits from a conservative investment strategy and a strong distribution network. Strengths include a high-quality asset portfolio and solid capital position. Weaknesses include exposure to interest rate risks and market volatility.

Baa3/BBB+/BBB
Life - Americas
$4.79bn in index across 8 issues

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11
Q

Corebridge Financial (CRBG)

A

A prominent provider of retirement solutions and insurance products in the U.S. It benefits from its strong partnerships and strategic investments, positioning it well for long-term growth. Strengths include a diversified product portfolio and robust financial backing. Weaknesses involve exposure to market volatility and regulatory changes.

Continue to see value in CRBG spread levels trading wide of EQH and ~40 bps behind MET. Credit metrics are stable with RBC ratio >400%, financial leverage 28.4%, OpCo dividends of +$1.1B in 1H24 (+10% y/y), and HoldCo liquidity of +1.9B. Earnings trends remain healthy (+9% y/y in 1H24) with improving base spread and fee income, partially offset by lower underwriting income due to the Laya Healthcare and UK Life divestitures. CRBG sales levels are also robust ranking as the 2nd largest writer of fixed annuities (2nd in fixed-rate deferred, 4th in fixed indexed) and the 12th largest writer of variable annuities (7th in traditional VA).

Baa2/BBB+/A-
Life - Americas
$11.78bn in index across 15 issues

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12
Q

EQUITABLE HOLDINGS INC (EQH)

A

Offers retirement, wealth, and asset management solutions through its Equitable and AllianceBernstein franchises. It is well-positioned due to its comprehensive product offerings and strong distribution network. Strengths include a diversified revenue base and solid investment capabilities. Weaknesses involve sensitivity to market conditions and regulatory changes. Fift highest quality life insurance name

Upgrading back to O/W to reflect an improved valuation vs. MET (~30 bps behind now versus ~13 bps on the last comp sheet). EQH fundamentals remain solid - $2B of HoldCo liquidity, 2024E FCF of $1.4-1.5B with ~50% from non-regulated subsidiaries, 425-450% 1H24 RBC ratio.

Baa1/A-
Life - Americas
$8.33bn in index across 14 issues ($5.03bn 144a)

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13
Q

GLOBAL ATLANTIC (FIN) CO (GBLATL)

A

Now a wholly-owned subsidiary of KKR, provides retirement and life insurance products. It benefits from KKR’s investment expertise and long-term capital structure. Strengths include strong financial ratings and a stable capital base. Weaknesses include reliance on market performance and potential integration challenges.

Downgrading to a Neutral recommendation on GBLATL. Spreads have come a long way since this bond was issued at +450 bps in June of 2023, but the compression towards higher-quality L&R peers has stalled over the past six months with GBLATL settling in ~60-80 bps behind CRBG. At this point, we are struggling to find the next catalyst for this high-beta credit, barring a meaningful risk-on environment which seems unlikely given weakness in recent economic data, and are concerned about the spread widening that could occur in a downside scenario (see 2022 as an example). Recommend reducing/exiting our positions and reassessing in 3-6 months.

Baa2/BBB-(Pos)/BBB
Life - Americas
$6.85bn in index across 11 issues ($5.50bn 144a)

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14
Q

GUARDIAN LIFE INSURANCE COMPANY OF AMERICA (GUARDN)

A

Mutual life insurance company offering a range of insurance and financial products. It is distinguished by its mutual ownership structure, aligning interests with policyholders. Strengths include strong financial ratings and a stable capital base. Weaknesses involve modest profitability and exposure to less creditworthy products.

Aa1/AA+
Life - Americas
$4.53bn in index across 11 issues ($4.53bn 144a)

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15
Q

JACKSON FINANCIAL INC (JXN)

A

Focuses on retirement savings and income solutions, leveraging its well-known brand and efficient operating platform. It is well-positioned due to its differentiated products and strong distribution network. Strengths include robust financial performance and a scalable operating model. Weaknesses involve sensitivity to market conditions and interest rate fluctuations.

Baa3/BBB/BBB
Life - Americas
$4.80bn in index across 10 issues ($3.05bn 144a)

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16
Q

LINCOLN NATIONAL CORPORATION (LNC)

A

Offers a range of financial products including life insurance, annuities, and retirement plan services. It is distinguished by its strong brand and comprehensive service offerings. Strengths include a solid financial position and diversified product mix. Weaknesses involve exposure to market volatility and regulatory risks.

Downgrading to U/W to reflect a tight valuation only ~10 bps behind CRBG. In 2Q24, LNC’s RBC ratio improved to 420%, which is now above-target and concludes the company’s capital rebuild following the large actuarial charge incurred in 3Q22. However, HoldCo liquidity remains thin and leverage elevated, FCF is weak, and ongoing operating trends continue to be lackluster

Baa2/BBB+/BBB+
Life - Americas
$4.68bn in index across 11 issues

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17
Q

MANULIFE FINANCE DELAWARE LP (MFCCN)

A

Global financial services group offering insurance, wealth, and asset management solutions. It operates under the John Hancock brand in the U.S. and has a strong presence in Asia and Canada. Strengths include high financial ratings and a diversified business model. Weaknesses involve exposure to market volatility and regulatory changes. Fourth highest quality life insurance name

A/A+
Life - Americas
$3.75bn in index across 5 issues

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18
Q

MASSACHUSETTS MUTUAL LIFE INSURANCE CO (MASSMU)

A

Offers a wide range of insurance and financial products. It is well-positioned due to its mutual ownership structure and long-term investment strategy. Strengths include strong financial ratings and a prudent investment approach. Weaknesses involve exposure to market fluctuations and interest rate risks.

Aa3/AA+/AA+
Life - Americas
$11.74bn in index across 18 issues ($11.74bn 144a)

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19
Q

METROPOLITAN LIFE INSURANCE COMPANY (MET)

A

Global provider of insurance, annuities, and employee benefit programs. It stands out due to its extensive global reach and diversified business model. Strengths include strong financial performance and a well-recognized brand. Weaknesses involve exposure to global economic conditions and regulatory changes. Top Life Insurance name

A3/A-/A-
Life - Americas
$29.80bn in index across 41 issues ($15.95bn 144a)

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20
Q

MINNESOTA LIFE INSURANCE CO (MNMUTC)

A

Part of Securian Financial Group, provides a variety of insurance products. It benefits from a strong focus on asset quality and capital strength. Strengths include high financial ratings and a stable investment portfolio. Weaknesses involve exposure to market volatility and economic cycles.

A3/A-/A
Life - Americas
$0.50bn in index across 1 issues ($0.50bn 144a)

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21
Q

NATIONAL LIFE INSURANCE CO (LIFEVT)

A

Mutual insurance company providing life insurance and annuity products. It is well-positioned due to its mutual ownership structure, which aligns interests with policyholders, and its strong market position in life insurance. Strengths include high financial ratings and consistent operating profitability. Weaknesses involve exposure to market risks and regulatory changes.

A1/A+
Life - Americas
$0.50bn in index across 1 issues ($0.50bn 144a)

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22
Q

NEW YORK LIFE INSURANCE COMPANY (NYLIFE)

A

A leading mutual life insurer offering a wide range of insurance and financial products. It is distinguished by its strong brand and extensive market reach. Strengths include robust financial performance and a well-diversified business model. Weaknesses involve exposure to global economic conditions and regulatory changes.

Aaa(Neg)/AA+/AAA
Life - Americas
$16.11bn in index across 21 issues ($16.11bn 144a)

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23
Q

NORTHWESTERN MUTUAL GLOBAL FUNDING (NWMLIC)

A

Leading provider of insurance and investment solutions, known for its exceptional financial strength and mutual ownership structure. It is well-positioned due to its strong brand and diversified product offerings. Strengths include the highest available financial strength ratings and a stable capital base. Weaknesses involve exposure to market volatility and interest rate risks.

Aaa/AA+/AA+
Life - Americas
$10.35bn in index across 14 issues ($10.35bn 144a)

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24
Q

NUVEEN FINANCE LLC (TIAAGL)

A

Part of TIAA, offers investment solutions and funding agreements. It is well-positioned due to its strong brand and investment expertise. Strengths include robust financial performance and a diversified investment portfolio. Weaknesses involve exposure to market risks and regulatory changes.

Aa2/AA/AA+
Life - Americas
$8.20bn in index across 7 issues ($8.20bn 144a)

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25
Q

OHIO NATIONAL LIFE INSURANCE CO (OHNAT)

A

Now operating under the name AuguStar Life Insurance Company, focuses on providing life insurance and annuity products. It benefits from disciplined financial management and strong investor backing. Strengths include solid financial ratings and a stable investment portfolio. Weaknesses include high exposure to interest rate risks and market volatility.

Continue to recommend an O/W positioning on OHNAT 6.8 2030 because of the attractive spread level relative to peers and our ‘Improving’ credit outlook. Capital ratios remain very strong and YTD statutory net income of +$71M is solid. More importantly, we’ve seen a strong pickup in new annuity sales over the past three quarters including individual annuity premiums of +$1.7B in 1H24 (up significantly from only +$37M in 1H23). Ratings are biased upwards with Fitch recently moving to a positive outlook (BBB- rating). While the Moody’s rating remains HY (Ba1) with a stable outlook, ongoing momentum in new sales, particularly if OHNAT can successfully grow its life insurance premiums, should increase the likelihood of a positive outlook over the next 1-2 years.

Baa1/BBB-(Pos)
Life - Americas
$0.68bn in index across 2 issues

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26
Q

ONEAMERICA FINANCIAL PARTNERS INC (ONEAM)

A

Provides a range of insurance and financial products, focusing on retirement and employee benefits. It benefits from a strong market presence and diversified product offerings. Strengths include solid financial ratings and a stable capital base. Weaknesses involve exposure to market volatility and economic cycles.

A-/BBB+
Life - Americas
$0.40bn in index across 1 issues ($0.40bn 144a)

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27
Q

PACIFIC LIFE INSURANCE COMPANY (PACLIF)

A

Offers a variety of insurance and financial products, known for its strong brand and customer focus. It is well-positioned due to its diversified business model and investment expertise. Strengths include high financial ratings and a stable investment portfolio. Weaknesses involve exposure to market risks and regulatory changes.

Aa3/AA-/A+
Life - Americas
$7.50bn in index across 14 issues ($7.50bn 144a)

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28
Q

PRINCIPAL LIFE GLOBAL FUNDING II (PFG)

A

Global financial services company offering a wide range of products and services, including retirement, insurance, and asset management solutions. It is well-positioned due to its diversified business model and strong brand recognition. Strengths include robust financial ratings and a stable capital base, which enhance its creditworthiness. Weaknesses involve exposure to market volatility and interest rate fluctuations, which can impact its financial performance.

Baa1/A-/A-
Life - Americas
$9.61bn in index across 21 issues ($6.05bn 144a)

29
Q

PRUDENTIAL FINANCIAL INC (PRU)

A

Global financial services leader offering a wide range of insurance, investment management, and other financial products and services. It operates through several segments, including PGIM (investment management), Retirement Strategies, Group Insurance, Individual Life, and International Businesses. Prudential is well-positioned due to its extensive global reach and diversified business model. Strengths include strong financial performance and a well-recognized brand. Weaknesses involve exposure to global economic conditions and regulatory changes, which can impact its financial stability. Second highest quality life insurance name

A3/A/A-
Life - Americas
$21.02bn in index across 29 issues

30
Q

REINSURANCE GROUP OF AMERICA INCORPORATED (RGA)

A

Specializes in life reinsurance, providing solutions to insurance companies worldwide. It benefits from a strong market position and diversified business operations. Strengths include robust financial performance and a stable capital base. Weaknesses involve exposure to market volatility and regulatory changes.

We think spreads in the +135bp context remain ~15bp cheap relative to EQH as the liability profile should be less correlated with macroeconomic performance. RGA has a less diversified business mix and credit metrics are weaker, but risk-adjusted profitability is much higher and debt-to-EV is the same at ~33%. We also view RGA’s ability to underwrite facultative reinsurance as a positive credit differentiator, which can allow it to select and manage underwriting risks more efficiently. The bonds look cheap versus VTR 5.625 2034s at +125bp given similar debt-to-EV and our concerns about the index rating at VTR.

Baa1/A/A-
Life - Americas
$5.35bn in index across 10 issues ($2.70bn 144a)

31
Q

SBL HOLDINGS LLC (SECBEN)

A

Associated with Security Benefit, provides retirement and investment solutions. It benefits from a strong focus on innovation and customer service. Strengths include solid financial ratings and a diversified product portfolio. Weaknesses involve exposure to market risks and economic cycles.

A-
Life - Americas
$1.00bn in index across 2 issues ($1.00bn 144a)

32
Q

UNUM GROUP (UNM)

A

Leading provider of financial protection benefits, including disability, life, accident, critical illness, dental, and vision coverage. It is well-positioned due to its strong market presence in the U.S., U.K., and Poland, and its focus on disability income insurance. Strengths include a solid capital position and consistent profitability. Weaknesses involve exposure to long-term care liabilities and market risks.

Upgrade to overweight following Fitch’s positive outlook revision. 30y spreads are 15bp wide of BBB and 40-45bp wide of BBB+ life insurance comps with similar duration, which we view as attractive given the improvements made to the asset and liability profiles. The company has also seen leverage (inc. losses) decline almost 4pts since 2022 to 24.9% and RBC up 50pts to ~470%. These actions, in addition to improved profitability, were cited as key drivers of the positive outlook at Fitch. We think there is a moderate probability of a rating upgrade over the next 12 months as the triggers are effectively maintenance of profitability and leverage at current levels. A positive rating trajectory at S&P is possible over this timeframe based on our expectation that leverage will remain in the low-20%, however an upgrade at Moody’s will be more difficult and contingent on a full exit from long-term care. We think spreads should trade flat to BBB life insurance comps.

Baa2/BBB/BBB
Life - Americas
$2.95bn in index across 7 issues

33
Q

VOYA FINANCIAL INC (VOYA)

A

Offers retirement, investment, and insurance solutions, focusing on helping clients achieve financial wellness. It is well-positioned due to its strong brand and comprehensive service offerings. Strengths include robust financial performance and a diversified business model. Weaknesses involve exposure to market volatility and regulatory changes.

Baa2/BBB+/BBB+
Life - Americas
$1.49bn in index across 4 issues

34
Q

WESTERN AND SOUTHERN LIFE INSURANCE CO (WSFIN)

A

Provides a range of insurance and financial products. It benefits from a strong financial position and diversified business operations. Strengths include high financial ratings and a stable capital base. Weaknesses involve exposure to market risks and economic cycles.

A3/A/A+
Life - Americas
$1.50bn in index across 3 issues ($1.50bn 144a)

35
Q

BUPA FINANCE PLC (BUPFIN)

A

International healthcare company providing health insurance and medical services. It is well-positioned due to its strong brand and extensive global operations, serving millions of customers worldwide. Strengths include robust financial performance and a diversified revenue base, which enhance its creditworthiness. Weaknesses involve exposure to regulatory changes and market volatility, which can impact its financial stability.

A3/BBB+
Life - Europe
No USD Bonds Outstanding

36
Q

RL FINANCE BONDS NO 2 PLC (RLMI)

A

Largest mutual life insurance and pensions company in the UK, offering a range of insurance and investment products. It benefits from its mutual ownership structure, which aligns the interests of the company with those of its policyholders. Strengths include strong financial backing and a stable capital structure, contributing to its creditworthiness. Weaknesses involve exposure to market risks and the subordinated nature of its debt, which can impact its financial stability.

Baa1/BBB+
Life - Europe
No USD Bonds Outstanding

37
Q

SWISS LIFE HOLDING AG (SLHNVX)

A

Leading provider of life insurance and pension solutions in Europe. It is well-positioned due to its strong market presence and diversified product offerings. Strengths include high financial ratings and a stable capital base. Weaknesses involve exposure to regulatory changes and market volatility, which can impact its financial performance.

A-
Life - Europe
No USD Bonds Outstanding

38
Q

NIPPON LIFE INSURANCE CO (NIPLIF)

A

One of Japan’s largest life insurance companies, offering a wide range of insurance and financial products. It is well-positioned due to its strong market presence and extensive distribution network. Strengths include robust financial ratings and a stable capital base. Weaknesses involve exposure to global economic conditions and regulatory changes, which can impact its financial stability.

A1/A+/A
Life - Other Developed
$8.20bn in index across 7 issues ($8.20bn 144a)

39
Q

ACRISURE LLC (ACRISU)

A

Global fintech company offering insurance, real estate, cyber services, and asset management. It is well-positioned due to its aggressive acquisition strategy and innovative approach. Strengths include strong revenue growth and a diversified product portfolio. Weaknesses involve high financial leverage and integration risks from acquisitions.

Caa2/CCC+
P&C - Americas
$3.73bn in index across 5 issues

40
Q

ALLIANT HOLDINGS INTERMEDIATE LLC (ALIANT)

A

Leading insurance brokerage firm specializing in niche markets and specialty programs. It is well-positioned due to its strong market presence and acquisition strategy. Strengths include steady revenue growth and strong operating margins. Weaknesses involve high financial leverage and integration risks from acquisitions.

Caa2/B
P&C - Americas
$5.24bn in index across 5 issues

41
Q

ALLIED WORLD ASSURANCE COMPANY HOLDINGS LTD (AWH)

A

Provides insurance and reinsurance solutions globally. It benefits from a strong market position and diversified product offerings. Strengths include solid financial performance and a stable capital base. Weaknesses involve exposure to market risks and regulatory changes.

–
P&C - Americas
No USD Bonds Outstanding

42
Q

ALLSTATE CORPORATION (THE) (ALL)

A

Leading personal lines insurer in the U.S., offering auto, home, and life insurance. It is well-positioned due to its strong brand and extensive distribution network. Strengths include solid financial performance and a diversified product portfolio. Weaknesses involve exposure to catastrophic events and regulatory changes.

Continue to recommend an O/W on ALL. The company recently announced the sale of its Employer Voluntary Benefits business to StanCorp for $2B, which is expected to close in 1H25. This will further bolster HoldCo liquidity (~$3B as of 2Q24) and could expedite deleveraging efforts (29.2% debt-to-cap in 2Q24; still ~400 bps above 2023 levels). Earnings continue to improve (net income +$1.7B y/y in 2Q24) driven primarily by ongoing re-underwriting initiatives in the personal auto portfolio, and we see a return to stable outlook from Moody’s as a likely outcome. Over time, we expect ALL spreads to compress towards PGR levels if profitability and leverage metrics continue to improve. CEO has historically been shareholderfriendly and a sooner-than-expected resumption of share repurchases is a key risk to our thesis

A3(Neg)/BBB+/BBB
P&C - Americas
$6.45bn in index across 12 issues

43
Q

AMERICAN FINANCIAL GROUP INC (AFG)

A

Holding company primarily engaged in property and casualty insurance, focusing on specialized commercial products. It is well-positioned due to its strong market presence and diversified product offerings. Strengths include robust financial performance and a stable capital base. Weaknesses involve exposure to market volatility and regulatory changes.

Baa1/BBB+
P&C - Americas
$0.89bn in index across 2 issues

44
Q

AMERICAN INTERNATIONAL GROUP INC (AIG)

A

Global insurance and financial services company offering a wide range of products, including general insurance, life insurance, and retirement services. It is well-positioned due to its extensive global reach and diversified business model. Strengths include strong financial performance and a well-recognized brand. Weaknesses involve exposure to global economic conditions and regulatory changes.

Leading global provider of P&C insurance, diversified, spun out Corebridge Financial (CBRG). Strong mgmt team. Conservative leverage (debt-to-capital: 18.1%). Strong but stable underwriting (CR: 91%). P&C pricing appears to be hitting an inflection point, with loss cost trends higher than premium rate increases. Upgrade to Baa1 likely. We continue to view fundamentals as solid and acknowledge the upward credit rating momentum with both the Moody’s and S&P ratings on positive outlook

Baa2 (Pos)/BBB+ (Pos)/BBB+
P&C - Americas
$6.77bn in index across 10 issues

45
Q

AMWINS GROUP INC (AMWINS)

A

The largest P&C wholesale broker and global distributor of specialty insurance products in the U.S. It is well-positioned due to its extensive market reach and strong acquisition strategy. Strengths include robust financial performance and a diversified product portfolio. Weaknesses involve exposure to market risks and integration challenges.

B3/B-
P&C - Americas
$1.54bn in index across 2 issues

46
Q

AON CORP (AON)

A

Provides risk management, insurance, and reinsurance brokerage services globally. It is well-positioned due to its comprehensive service offerings and strong client relationships. Strengths include robust financial flexibility and a diversified revenue base. Weaknesses involve exposure to regulatory changes and market risks.

Continue to recommend an O/W positioning on AON. Management remains committed to maintaining its existing credit ratings and is prioritizing deleveraging following the completion of the NFP acquisition primarily using FCF with $2.8B and $3.8B expected in 2024E and 2025E, respectively. We think spreads will compress back towards peer MMC over the next 1-2 years as AON executes on these deleveraging efforts and credit rating outlooks improve back to stable. 2Q24 earnings were healthy - organic revenue growth of +6%, adjusted operating income of +$1B (+19% y/y), and incremental margin expansion (+10 bps)

Baa2/A-(Neg)/BBB+(Neg)
P&C - Americas
$15.07bn in index across 20 issues

47
Q

ARCH CAPITAL GROUP (US) INC (ACGL)

A

Provides insurance, reinsurance, and mortgage insurance globally. It is well-positioned due to its diversified operations and strong underwriting performance. Strengths include robust financial performance and a solid capital base. Weaknesses involve exposure to market volatility and catastrophic events.

Baa1(Pos)/A-/A-
P&C - Americas
$2.75bn in index across 5 issues

48
Q

BERKSHIRE HATHAWAY (BRK)

A

Multinational conglomerate holding company with a diverse portfolio of businesses, including insurance, utilities, manufacturing, and retail. Its strong financial position and diversified revenue streams make it a unique player in the market. Strengths: Exceptional financial strength and a diversified business model reduce risk. Weaknesses: Large size and complexity can make management and strategic shifts challenging. Highest quality P&C name

Aa2/AA/AA-
P&C - Americas
$18.38bn in index across 15 issues

49
Q

BROADSTREET PARTNERS INC (BROPAR)

A

Insurance brokerage firm focusing on middle-market insurance. It is well-positioned due to its unique co-ownership model and steady growth. Strengths include good EBITDA margins and a diversified client base. Weaknesses involve high financial leverage and the complexity of its ownership structure.

Caa2/CCC+
P&C - Americas
$0.73bn in index across 1 issues

50
Q

BROWN & BROWN INC (BRO)

A

Insurance brokerage firm offering a wide range of insurance products and services. It benefits from a strong acquisition strategy and a decentralized operating model. Strengths include consistent revenue growth and a diversified service portfolio. Weaknesses involve exposure to economic cycles and integration risks from acquisitions.

We think the outperformance on a spread basis has been driven primarily by the move to positive outlook at Moody’s. While BRO has a credible path to a Baa2 rating at Moody’s with leverage at or below the upgrade trigger, the index rating would remain low-BBB so we see limited scope for spreads to trade flat or tight to WTW. Leverage is similar to WTW- including debt-toEBITDA of 2.6x and debt-to-capital of ~41% - but the business is ultimately subscale and more concentrated relative to this comp.

Baa3(Pos)/BBB-
P&C - Americas
$2.85bn in index across 5 issues

51
Q

CHUBB CORPORATION (CB)

A

One of the world’s largest publicly traded property and casualty insurers, offering a wide range of insurance products. It is well-positioned due to its strong brand and extensive global operations. Strengths include solid financial performance and a diversified product portfolio. Weaknesses involve exposure to market volatility and catastrophic events. Second highest quality P&C name

A/A+
P&C - Americas
$10.38bn in index across 12 issues

52
Q

CINCINNATI FINANCIAL CORPORATION (CINF)

A

Provides property and casualty insurance, focusing on personal and commercial lines. It is well-positioned due to its strong agent relationships and local market expertise. Strengths include a solid capital position and consistent dividend growth. Weaknesses involve exposure to catastrophic events and market volatility.

A3/BBB+/A-
P&C - Americas
$0.76bn in index across 2 issues

53
Q

EVEREST REINSURANCE HOLDINGS INC (RE)

A

Offers reinsurance and insurance solutions, focusing on property, casualty, and specialty lines. It benefits from a strong market position and diversified operations. Strengths include robust financial performance and a stable capital base. Weaknesses involve exposure to market volatility and catastrophic events.

Baa1/BBB+
P&C - Americas
$2.40bn in index across 3 issues

54
Q

FAIRFAX FINANCIAL HOLDINGS LTD (FFHCN)

A

Financial services holding company engaged in property and casualty insurance, reinsurance, and investment management. It differentiates itself through disciplined underwriting and a total return investment strategy. Strengths include a strong capital position and diversified operations. Weaknesses involve exposure to market volatility and complex investment strategies.

We believe the risk/reward is balanced with spreads ~15bp wide of RNR 5.75 2033s and ~30bp wide of ACGL 7.35 2034s. Although debt-to-capital rose 1.4pts sequentially to 28.6% in 2Q, we think a path to a high-BBB index rating over time remains possible. Agency adjusted leverage likely sits right at Fitch’s upgrade trigger but underwriting profitability and interest coverage remain consistent for an upgrade to BBB+. An upgrade of the index rating to high-BBB is not contingent on an S&P upgrade but remains a possibility if the company can deleverage ~3pts. We think spreads would start to look interesting 10bp wider. Spreads in the +165bp context would indicate a market-implied probability of an upgrade around 25%.

BBB+
P&C - Americas
$4.95bn in index across 7 issues

55
Q

HARTFORD FINANCIAL SERVICES GROUP INC (HIG)

A

Provides property and casualty insurance, group benefits, and mutual funds. It is well-positioned due to its strong brand and diversified product offerings. Strengths include robust financial performance and effective risk management. Weaknesses involve exposure to market risks and operational costs.

Baa1(Pos)/BBB+(Pos)
P&C - Americas
$3.51bn in index across 7 issues

56
Q

HUB INTERNATIONAL LTD (HBGCN)

A

Global insurance brokerage offering a wide range of insurance products and services. It is well-positioned due to its strong acquisition strategy and extensive market reach. Strengths include robust financial performance and a diversified revenue base. Weaknesses involve high financial leverage and integration risks from acquisitions.

Caa2/B-
P&C - Americas
$5.73bn in index across 3 issues

57
Q

LIBERTY MUTUAL INSURANCE COMPANY (LIBMUT)

A

Global property and casualty insurer offering a wide range of insurance products. It is well-positioned due to its strong brand and extensive global operations. Strengths include robust financial performance and a diversified revenue base. Weaknesses involve exposure to regulatory changes and market volatility.

Baa2/BBB
P&C - Americas
$6.29bn in index across 8 issues ($4.56bn 144a)

58
Q

LOEWS CORPORATION (L)

A

Diversified holding company with interests in insurance, energy, hospitality, and packaging. It benefits from a strong financial structure and conservative management. Strengths include a diversified business portfolio and solid financial flexibility. Weaknesses involve exposure to market risks and low portfolio diversification.

A3/A/A-
P&C - Americas
$1.80bn in index across 4 issues

59
Q

MARKEL GROUP INC (MKL)

A

Diversified financial holding company with a focus on specialty insurance and investments. It is well-positioned due to its strong underwriting capabilities and diversified business model. Strengths include robust financial performance and a stable capital base. Weaknesses involve exposure to market volatility and regulatory changes.

Baa2/BBB
P&C - Americas
$3.70bn in index across 8 issues

60
Q

MARSH & MCLENNAN COMPANIES INC (MMC)

A

Global professional services firm providing advice and solutions in risk, strategy, and people. It is well-positioned due to its comprehensive service offerings and strong client relationships. Strengths include robust financial performance and a diversified revenue base. Weaknesses involve exposure to regulatory changes and market risks. Fourth highest quality P&C name

We continue to view MMC as a stable credit with limited risk of the index rating falling to high-BBB, but we note the company has an outsized exposure (~20% operating income) to consulting versus peers. This income stream is project-based and relatively sensitive to macroeconomic performance as a result. The margins in consulting are relatively weak and volatile due to higher utilization of fixed salaries over variable commissions. We think these factors, on the margin, could drive underperformance from a spread perspective, especially with spreads trading about 25bp tight of low-A corps with similar duration

A3/A-/A-
P&C - Americas
$10.95bn in index across 17 issues

61
Q

NATIONWIDE FINANCIAL SERVICES INC (NATMUT)

A

Offers a range of insurance and financial products, focusing on property and casualty insurance and life insurance. It benefits from strong capitalization and a diversified business model. Strengths include high financial ratings and a stable capital base. Weaknesses involve exposure to market risks and regulatory changes.

Baa1/BBB+/A-
P&C - Americas
$4.95bn in index across 8 issues ($4.55bn 144a)

62
Q

PROGRESSIVE CORPORATION (THE) (PGR)

A

Leading provider of personal and commercial auto insurance, as well as other property and casualty insurance products. It is well-positioned due to its strong brand and innovative pricing strategies. Strengths include robust financial performance and a diversified product portfolio. Weaknesses involve exposure to market volatility and competitive pressures. Third highest quality P&C name

A2/A/A
P&C - Americas
$6.95bn in index across 14 issues

63
Q

RADIAN GROUP INC (RDN)

A

Provides mortgage insurance and risk management products, primarily serving the U.S. housing market. It is well-positioned due to its strong market presence and focus on credit risk management. Strengths include a robust capital position and consistent profitability. Weaknesses involve exposure to housing market fluctuations and regulatory changes.

Baa3/BBB-/BBB-(Pos)
P&C - Americas
$1.08bn in index across 2 issues

64
Q

RENAISSANCERE FINANCE INC (RNR)

A

Specializes in reinsurance and insurance solutions, focusing on property, casualty, and specialty risks. It benefits from a strong market position and strategic acquisitions. Strengths include robust financial performance and a solid capital base. Weaknesses involve exposure to market volatility and catastrophic events.

We think spreads in the 130-135bp context are ~20bp cheap relative to high-BBBs like CNA (+105bp) and ALL (+90bp). These notes contain a principal deferral provision that is unique versus the RNR 3.6 2029s as it adds the risk of indefinite principal deferral, contingent on the company’s ability to meet BMA’s regulatory capital requirements at maturity. We believe this provision is worth about 15bp which is consistent with the BBB+/A- spread differential for P&C carriers. With the RNR 3.6 2029s flat to CNA 3.9 2029s and 6bp tight of ALL 1.45 2030s, we think fair value for the RNR 5.75 2033s is about +110bp. This would better reflect RNR’s much lower debt-to-capital ratio of 16% relative to CNA at 23% and ALL at 34%. We expect underwriting results to be relatively volatile but the combined ratio is currently 15pts lower than these comps. RNR also converts a larger percentage of revenue into free cash flow, which we view as a positive credit differentiator in a slowing economy.

A3/BBB+/A-
P&C - Americas
$1.45bn in index across 3 issues

65
Q

TRAVELERS COMPANIES INC (TRV)

A

Leading provider of property casualty insurance for auto, home, and business. It is well-positioned due to its diverse business lines and strong distribution network. Strengths include solid financial performance and a diversified revenue base. Weaknesses involve exposure to catastrophic events and regulatory changes.

A2/A/A
P&C - Americas
$7.55bn in index across 13 issues

66
Q

USAA CAPITAL CORP (USAACA)

A

Provides financial services including insurance, banking, and investment products to military members and their families. It is well-positioned due to its strong brand and loyal customer base. Strengths include high financial ratings and a conservative investment portfolio. Weaknesses involve exposure to catastrophic events and regulatory changes.

Aa1(Neg)/AA(Neg)
P&C - Americas
$0.90bn in index across 2 issues ($0.90bn 144a)

67
Q

WR BERKLEY CORPORATION (WRB)

A

Commercial lines property and casualty insurance provider. It is well-positioned due to its strong underwriting capabilities and diversified operations. Strengths include robust financial performance and a stable capital base. Weaknesses involve exposure to market volatility and catastrophic events.

Baa1/BBB+(Pos)/A-
P&C - Americas
$1.57bn in index across 4 issues

68
Q

HANNOVER RUECK SE (HANRUE)

A

One of the world’s largest reinsurance companies, offering property & casualty and life & health reinsurance. It is well-positioned due to its strong market presence and diversified operations. Strengths include high financial ratings and a stable capital base. Weaknesses involve exposure to catastrophic events and regulatory changes.

Does not issue USD

A/A+
P&C - Europe
No USD Bonds Outstanding

69
Q

SOCIETY OF LLOYDS (LLYDIN)

A

Commonly known as Lloyd’s of London, is a marketplace for insurance and reinsurance. It is well-positioned due to its unique structure and global reach. Strengths include a strong capital base and diversified risk portfolio. Weaknesses involve exposure to market volatility and regulatory changes.

Does not issue USD

A/A-
P&C - Europe
No USD Bonds Outstanding

Corps (15 decks)

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