Fitch Affirms StanCorp's Ratings; Outlook Stable

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) for StanCorp Financial Corporation (StanCorp) at 'A-'. Fitch has also affirmed the Insurer Financial Strength (IFS) ratings for StanCorp's life insurance subsidiaries at 'A'. The Rating Outlook is Stable. A complete list of rating actions follows at the end of this release.

KEY RATING DRIVERS

Fitch's rating action follows the agency's revision of Meiji Yasuda Life Insurance Company's (MYL: 'A' IFS) Outlook to Negative (see Fitch Revises Outlooks on 11 Japanese Insurers to Negative dated June 16, 2016 at www.fitchratings.com). This action follows a revision of the Outlook of Japan's sovereign rating to Negative.

Fitch would consider rating StanCorp's IFS one notch above its parent, due to its strong standalone credit profile and lack of direct exposure to Japan and the issues constraining its sovereign rating, including not having any direct investments in Japanese government bonds. Therefore, if Japan is downgraded by one notch, Fitch expects StanCorp's ratings to be unaffected.

Fitch views StanCorp's standalone credit profile as in line with an 'A' IFS rating, which reflects its strong competitive position in the group life and disability market, improving operating performance, strong capitalization and moderate financial leverage. Fitch's standalone assessment also considers the ongoing challenges to operating margins given the competitive market conditions and weak economic environment, including persistently low interest rates and somewhat weak employment conditions.

RATING SENSITIVITIES

Fitch would likely affirm StanCorp's ratings if Japan is downgraded by one notch.

StanCorp's holding company ratings are somewhat constrained by MYL's ratings, which are capped by Japan's Long-Term Local-Currency IDR of 'A'. Given that MYL's ratings have a Negative Outlook, an upgrade of StanCorp is unlikely in the near term.

Fitch has affirmed the following with a Stable Outlook:

StanCorp Financial Corp.

--IDR at 'A-';

--$250 million 5.000% senior notes due Aug. 15, 2022 at 'BBB+';

--60-year $253 million junior subordinated debt due June 1, 2067 at 'BBB-'.

Standard Insurance Company

--IFS at 'A'.

Standard Life Insurance Co. of New York

--IFS at 'A'.

Additional information is available on www.fitchratings.com.

Applicable Criteria

Insurance Rating Methodology (pub. 17 May 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=881564

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1006173

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1006173

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160616006180/en/

Fitch Ratings
Primary Analyst
Jamie R. Tucker, CPA
Director
+1-212-612-7856
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Dafina M. Dunmore, CFA
Director
+1-312-368-3136
or
Committee Chairperson
Donald F. Thorpe, CFA, CPA
Senior Director
+1-312-606-2353
or
Media Relations
Hannah James
+ 1-646-582-4947
New York
[email protected]

Source: Fitch Ratings

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