Bermudian-based life reinsurer and retirement services company Athene Holding Ltd and its subsidiaries have received credit ratings upgrades from Fitch Ratings.

Fitch upgraded the Insurer Financial Strength ratings of Athene Annuity & Life Assurance Company, Athene Annuity and Life Company, Athene Annuity & Life Assurance Company of New York, and Athene Life Re Ltd (collectively referred to as Athene) to “A+” from “A” (Strong).

Fitch also upgraded the Long-Term Issuer Default Rating of Athene Holding Ltd. (Athene) to “A-” from “BBB+”. The Rating Outlook for Athene and subsidiaries is Stable.

Fitch said: “Today’s rating action reflects improvement in Athene’s company profile, which has been bolstered through organic and inorganic growth across multiple product lines and geographies, while the company's earnings and capital have remained in line with Fitch's expectations.

“Notably, Athene maintains leading market positions in several core markets as of year-end 2021 and benefits from material competitive advantages and significant operating scale. Fitch Ratings' view also considers the company's history of strong execution of inorganic growth.”

The agency noted the company's “very strong financial performance and strong capitalisation, offset somewhat by investment and asset risk and exposure to movements in interest rates and asset price volatility”.

Fitch said Athene’s merger with Apollo Global Management, which closed this year, was broadly neutral from a credit perspective.

The agency added: “Athene's earnings continued to be very strong and 2021 results were bolstered by strong asset returns and continued growth in core product lines.

“The company’s earnings are primarily driven by interest margins on spread-based products, and Fitch expects that rising interest rates will benefit earnings, although a rapid rise in interest rates or severely depressed economic environment could add near-term volatility. Fitch expects Athene's profitability metrics to remain in line with rating expectations in 2022.”

It said: “Athene's investment portfolio is somewhat more exposed to market volatility than the broader life industry, although Fitch notes that the company's portfolio continues to perform well, with only minimal reported impairments. Fitch takes a cautious view of ATH's position in lower quality commercial mortgage loans and structured assets, as Fitch expects those asset classes could generate credit impairments or material unrealised losses in a stressed economic environment.“