AM Best Downgrades Credit Ratings of Mutual of America Life Insurance Company and TruSpire Retirement Insurance Company

AM Best has downgraded the Financial Strength Rating (FSR) to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) to “a-” (Excellent) from “a” (Excellent) of Mutual of America Life Insurance Company (MofA) (New York, NY). The outlook of these Credit Ratings (ratings) is negative. Concurrently, AM Best has downgraded the FSR to B++ (Good) from A- (Excellent) and the Long-Term ICRs to “bbb+” (Good) from “a-” (Excellent) of TruSpire Retirement Insurance Company (TruSpire) (Irving, TX), a wholly owned subsidiary of Mutual of America Life Insurance Company. The outlook of these ratings is stable.

The ratings of MofA reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The rating downgrades are associated with overall deterioration in MofA’s business profile assessment, based on the company’s ongoing shift in strategy while undergoing a change in leadership. The negative outlooks reflect AM Best’s concern over the company maintaining its very strong balance sheet assessment due to continued outflows and pressure on its risk-adjusted capitalization, measured by Best’s Capital Adequacy Ratio (BCAR). Furthermore, there has been continued weakness in MofA’s ERM due to risks related to long-term financial planning, which may impact the company’s financial and operational targets.

In addition, there has been continued weakness in MofA’s operating metrics. The company’s net income has declined significantly in recent years, mainly due to higher general operating expenses, including business transformation initiatives. AM Best’s expectation is that MofA will continue to execute the necessary steps to curb volatility and improve its overall operating performance along with its strategic business profile in the near term to stabilize the organization.

MofA provides retirement savings ­products to nonprofit organizations and small for-profit businesses with a strategy of asset retention and a focus on controlling outflows and expenses related to the company’s divestment of its real estate portfolio and product launches. AM Best will continue to monitor the company’s results as MofA continues to execute on its business strategy.

The ratings of TruSpire reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM.

The rating downgrades for TruSpire reflect the removal of rating enhancement afforded by its parent MofA due to its own rating downgrades. In AM Best’s view, the strategic objectives for TruSpire also have shifted from its original targeted plan as previously presented. TruSpire maintains the strongest level of risk-adjusted capitalization, as measured by BCAR, along with a conservative investment portfolio.

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.

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