Fitch Assigns 'BBB+' IFS Rating to Eagle Life Insurance Company

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has assigned an Insurer Financial Strength (IFS) of 'BBB+' to Eagle Life Insurance Company (Eagle Life), whose ultimate parent company is American Equity Investment Life Holding Company (AEL). The Rating Outlook is Stable.

KEY RATING DRIVERS

Fitch considers Eagle Life to be 'core' under the agency's group rating methodology. As such, Eagle Life has been assigned the group rating. Fitch affirmed the ratings of AEL and its insurance operating subsidiaries on July 7, 2015.

Eagle Life was formed in 2008 and supports AEL's strategy of expanding distribution of core annuity products into broker-dealers and banks. The company reinsures most of its new business to AEL's lead insurance company, American Equity Investment Life Insurance Company. Eagle Life has no distinct operating profile as it is fully integrated into AEL's infrastructure.

RATING SENSITIVITIES (for AEL organization)

The ability of AEL to achieve a higher IFS rating is somewhat constrained by the company's limited diversity of earnings and cash flow given its heavy focus on fixed indexed annuities. This constraint could be overcome by the following:

--Enhanced capitalization with RBC above 350% on a sustained basis;

--Financial leverage below 25%;

--Continued stable or improved operating results and investment quality.

The key rating triggers that could result in a downgrade include:

--A reduction in capitalization with RBC below 300%;

--Sustained deterioration in operating results such that interest coverage is below 3x;

--Significant increase in lapse/surrender rates;

--Financial leverage above 50%.

The key rating triggers that could result in a narrowing of notching between the IDR of AEL and the IFS of AEILIC include:

--A sustainable decline in financial leverage below 30%;

--Sustained GAAP EBIT-based interest coverage above 8x.

FULL LIST OF RATING ACTIONS

Fitch has assigned the following rating with a Stable Rating Outlook:

Eagle Life Insurance Company

--IFS 'BBB+'.

Additional information is available on www.fitchratings.com

Applicable Criteria

Insurance Rating Methodology (pub. 14 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868367

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=988473

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=988473

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/20150724005510/en/

Fitch Ratings
Primary Analyst
Bradley S. Ellis, CFA
Director
+1-312-368-2089
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Tana M. Higman
Director
+1-312-368-3122
or
Committee Chairperson
Mark E. Rouck, CPA, CFA
Senior Director
+1-312-368-2085
or
Media Relations:
Alyssa Castelli, New York, +1 212-908-0540
Email: [email protected]

Source: Fitch Ratings

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