Weiss Ratings: Massachusetts Mutual, Northwestern Mutual and NY Life Among Nation's Strongest Life and Annuity Insurers

Weiss Ratings Releases Free Lists of 80 Strongest and 74 Weakest

JUPITER, Florida (June 10, 2010) – Unlike some of the nation’s largest banks, many large life and annuity insurers, including Massachusetts Mutual, Northwestern Mutual, NY Life, Principal Life and TIAA, receive top grades from Weiss Ratings, the nation’s only provider of independent insurance company ratings.  

However, Weiss Ratings also found that many smaller insurers, including Conseco Life, AGL Life Assurance Co., Scor Global Life, Jefferson National Life and Banner Life are vulnerable to financial difficulties based on Weiss Ratings’ analysis of each insurer’s risk-adjusted capital, five-year historical profitability, quality of investments, liquidity, asset and premium growth, plus other factors.   

Among the 887 U.S. life and annuity insurers covered, 80 insurers, controlling $1.3 trillion, or 26.6% of the industry’s assets, are viewed as strong enough to be recommended to consumers, receiving a rating of B+ (good) or higher, while 74 companies controlling only $22.2 billion, or 0.5% of the industry’s total assets, are considered vulnerable, meriting a Weiss Financial Strength Rating of D+ (weak) or lower. 

“The bulk of the assets in the life and annuity insurance industry are controlled by relatively strong and stable institutions, making it stronger overall than the banking industry,” said Martin D. Weiss, president of Weiss Ratings. “Although profitability in the industry fell during the debt crisis and then recovered last year, the strongest insurers remained financially healthy throughout the market turmoil. But that does not preclude future failures among the weakest, especially if the economy experiences another downturn.”

Life and annuity insurers reported a dramatic turnaround in profits in 2009, earning $21.1 billion compared to a $51.8 billion loss in 2008. This improvement was primarily due to a $45 billion decrease in the amount of additional reserves that were set aside as well as a decrease in net realized losses on investments, which dropped from $50.5 billion in 2008 to $28.7 billion in 2009. 

Below are the nation’s life and annuity insurers with $10 billion or more in assets receiving a Weiss Rating of B+ or higher:

Strongest U.S. Life & Annuity Insurers
(with a Weiss Rating of B+ or higher and assets of $10 billion or more; 12/31/09 data)
Institution
State
Weiss Rating
Assets ($mil)
Teachers Ins & Annuity Asn of America
NY
A+
201,728.0
Northwestern Mutual Life Ins Co
WI
A-
166,746.6
Massachusetts Mutual Life Ins Co
MA
A
121,329.3
Principal Life Ins Co
IA
A-
118,786.3
New York Life Ins Co
NY
A-
117,835.5
Pacific Life Ins Co
NE
A-
94,738.5
New York Life Ins & Annuity Corp
DE
A-
88,832.6
Allstate Life Ins Co
IL
B+
63,008.5
State Farm Life Ins Co
IL
A+
47,959.8
Guardian Life Ins Co of America
NY
A
30,895.2
Midland National Life Ins Co
IA
B+
26,496.9
Weiss Ratings Scale: A=Excellent, B=Good, C=Fair, D=Weak, E=Very Weak. Plus sign=top third of grade range; minus sign=bottom third.

Among the U.S. life and annuity insurers that Weiss Ratings considers vulnerable, there are eight companies with $1 billion or more in assets:

U.S. Life & Annuity Insurers Considered Vulnerable
(with a Weiss Rating of D+ or lower and assets of $1 billion or more; 12/31/09 data)
Institution
State
Weiss Rating
Assets ($mil)
Conseco Life Insurance Co
IN
D
4,382.2
AGL Life Assurance Co
PA
D+
3,777.0
Scor Global Life US Re Ins Co
TX
D+
2,307.9
Jefferson National Life Ins Co
TX
D
1,572.6
Banner Life Insurance Co
MD
D+
1,414.1
Wilton Reassurance Life Co of NY
NY
D
1,182.5
Wilton Reassurance Co
MN
D
1,179.6
Liberty Bankers Life Ins Co
OK
D+
1,040.4
Weiss Ratings Scale: A=Excellent, B=Good, C=Fair, D=Weak, E=Very Weak. Plus sign=top third of grade range; minus sign=bottom third.

To help consumers avoid the weakest insurers and find the strongest in their state, Weiss Ratings has released its list of 74 weakest and 80 strongest life and annuity insurers to the public.  Consumers can immediately receive the lists at no charge by providing their email address at www.weissratings.com/lifelist.

“The importance of selecting a strong insurer is paramount,” warned Weiss.  “The purchase of an insurance policy or annuity is a long-term decision so consumers need to choose an insurer with the financial strength to withstand adverse economic conditions over the long haul.”

About Weiss Ratings

Weiss Ratings accepts no payments for its ratings from rated institutions. It is among the nation’s leading providers of independent ratings on 8,000 U.S. banks and S&Ls and the only provider of independent ratings on the nation’s 4,200 insurance companies. Weiss Ratings also distributes independent ratings on the shares of thousands of publicly traded companies, mutual funds, closed-end funds and ETFs. Weiss identified, in advance, nearly all major banks that failed or required a federal bailout in the 2008-2009 debt crisis. (See Weiss Warnings of Financial Failures in Debt Crisis of 2008-2009.)

Separately, Weiss outperformed Standard and Poor’s, Moody’s, A.M. Best and Duff & Phelps (now Fitch) in warning of future life and health insurance company failures according to a landmark study by the U.S. Government Accountability Office (GAO), while also outperforming its competitors in identifying the strongest insurers, according to its follow-up study using the GAO’s research methodology.  According to a leading consumer publication’s May 2009 study of life insurance ratings by Fitch, Moody’s, S&P, A.M Best and Weiss Ratings, Weiss Ratings (formerly TheStreet.com Ratings) “was the toughest grader with independent and objective ratings.”

Thanks to its strong track record and independence, The New York Times wrote that Weiss was “the first to see the dangers and say so unambiguously;” Barron’s wrote that Weiss is “the leader in identifying vulnerable companies;” and Esquire concluded that Weiss Ratings is “the one company [that] … provides financial grades free of any conflicts of interest.”