A.M. Best has placed under review with negative implications the ratings of Protective Life Corporation (Protective) (headquartered in Birmingham, AL) [NYSE: PL] and its life/health subsidiaries following the announcement that it has entered into a definitive agreement for the sale of 100% of its outstanding stock to The Dai-ichi Life Insurance Company, Limited (Dai-ichi Life) (Tokyo, Japan).
Dai-ichi Life, publicly-traded on the Tokyo Stock Exchange since April 2010, is the second largest private life insurance company in Japan as measured by total assets as of March 31, 2014. Although the majority of Dai-ichi Life’s sales are in Japan, the company continues to seek opportunities to accelerate its overseas life insurance business expansion and enhance international business diversification. Dai-ichi Life intends to utilize Protective as its U.S. platform for selling life insurance and annuity products. The acquisition—with a purchase price of approximately $5.7 billion—is subject to regulatory and shareholder approvals.
The ratings will remain under review pending discussions with Dai-ichi Life’s management team as the new parent does not currently have a relationship with A.M. Best. Nevertheless, in the near to medium term, A.M. Best does not expect Protective’s operating profile, senior management or capitalization to change materially, if at all. It is expected that the transaction will close by year-end 2014 or early 2015.
For a complete listing of Protective’s financial strength, issuer credit and debt ratings, please visit www.ambest.com/press/060406protective.pdf.The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.