AM Best Affirms Credit Ratings of Insurance Subsidiaries of OneMain Holdings, Inc.

Rhea-AI Summary

AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of bbb (Good) for American Health and Life Insurance Company (AHLIC) and Triton Insurance Company (both based in Fort Worth, TX). These companies are wholly owned subsidiaries of OneMain Holdings, Inc. (NYSE: OMF), headquartered in Evansville, IN. The outlook for these ratings is stable. Key rating strengths include very strong balance sheet strength and strong operating performance. However, both companies face challenges due to their reliance on OneMain as a primary distribution source and concentration in credit insurance products.

Positive

• AM Best affirms Financial Strength Rating of B++ (Good) for AHLIC and Triton.
• AHLIC and Triton demonstrate very strong balance sheet strength.
• Both companies maintain strong operating performance.
• AHLIC's risk-adjusted capitalization remains strong according to BCAR metrics.

Negative

• AHLIC and Triton are dependent on OneMain for distribution, creating risk.
• Significant concentration in credit insurance products may impact diversification.
• Triton faces financial constraints regarding dividends that could stress future capital.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb” (Good) of American Health and Life Insurance Company (AHLIC) and Triton Insurance Company (Triton) (both domiciled in Fort Worth, TX). Both companies are wholly owned subsidiaries of OneMain Holdings, Inc. (OneMain) [NYSE: OMF] (headquartered in Evansville, IN). The outlook of these Credit Ratings (ratings) is stable.

The ratings of AHLIC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). AHLIC’s ratings also reflect drag from the parent company OneMain, a consumer finance company, which has considerable financial leverage within our measurement. While OneMain has exhibited an improved risk profile in recent years, AHLIC and Triton are dependent on it as a primary distribution source, and both insurance companies continue to have significant concentration in credit insurance products. AHLIC also provides term life insurance, which adds some diversity to its relatively narrow portfolio of products. AHLIC has maintained the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and generates consistent, favorable operating performance relative to peers and industry benchmarks.

The ratings of Triton reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate ERM. Triton’s ratings also reflect a drag from OneMain. Triton maintains the strongest level of risk-adjusted capitalization, as measured by BCAR. In addition, AM Best considers Triton’s financial constraints in terms of dividends in the ratings, as these constraints may stress risk-adjusted capitalization in the future. Triton has generated strong operating results in the last two years, which followed significant volatility in premium volume and incurred losses in 2020, due to the economic and financial impact of COVID-19 on its main product, involuntary unemployment insurance.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230303005367/en/

Robert Valenta

Senior Financial Analyst

+1 908 439 2200, ext.5291

robert.valenta@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Kate Steffanelli

Associate Director

+1 908 439 2200, ext.5063

kate.steffanelli@ambest.com

Al Slavin

Senior Public Relations Specialist

+1 908 439 2200, ext. 5098

al.slavin@ambest.com

Source: AM Best

FAQ

What are the recent ratings for OneMain Holdings, Inc. (OMF)?

AM Best has affirmed a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of bbb (Good) for its subsidiaries.

What is the outlook for the ratings of OneMain's subsidiaries?

The outlook for the ratings of American Health and Life Insurance Company and Triton Insurance Company is stable.

How does OneMain Holdings impact the ratings of its subsidiaries?

OneMain's considerable financial leverage is a drag on the ratings of its subsidiaries.

What factors are considered in the ratings for American Health and Life Insurance Company?

Key factors include balance sheet strength, operating performance, and depending on OneMain for distribution.

What is the significance of the B++ rating for investors in OneMain Holdings (OMF)?

A B++ rating indicates good financial strength but highlights reliance on OneMain, which may impact investor confidence.