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Off-shore Transaction Shores Up Pan-American Credit Rating

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Pan-American Life Insurance Company (PALIC) and its wholly owned subsidiary, Pan-American Assurance Company (PAAC) were given an ‘A’ Insurer Financial Strength (IFS) rating by Fitch Ratings. Pan-American, as the two are jointly called, was given a rating outlook of Stable by Fitch.

The company’s strong foothold as a niche player as well as its nominal exposure to troubled assets bolstered its rating.

The ratings by Fitch on Nov 9, come on the heels of an announcement by Pan-American Life Insurance Group, Inc. (PALIG) that it will be finalizing an agreement with MetLife Inc., to acquire group life and health businesses as well as an international dollar business in Panama, Costa Rica and the Caribbean.

MetLife’s dealings in Central America originally stem from their acquisition of American Life Insurance Company (ALICO), an affiliate of American International Group (AIG) in 2010. Fitch regards PALIG’s foray into the Central American market as a logical step, both from a product perspective as well as from a geographic one.

PALIG will utilize investments at the holding company level to fund the transaction. The closing is expected to take place in six to eight months due to regulatory approval.