[June 12, 2014]

Fitch Releases Updated Report on Life Insurer Statutory Dividend Capacity

Fitch Ratings has published a report examining statutory dividend capacity in the U.S. life insurance industry. The report reflects statutory dividend capacity for 2014 based upon yearend 2013 statutory statement information.

The report provides insight into trends in non-extraordinary dividend capacity of insurance operating companies over the past several years in addition to expectations for 2014. The report also examines the extent to which debt service within the industry has been covered by both non-extraordinary statutory dividends and actual statutory dividends paid.

For Fitch's universe of life insurance companies, excluding pure mutual insurance organizations, statutory dividend capacity increased approximately 19% in 2014, to $24.3 billion, following a 36% increase in 2013.

While the increase in statutory dividend capacity in 2013 led to a significant increase in statutory interest coverage in that year, capacity is not expected to change significantly in 2014 for the group of companies used in the study, despite another strong increase in statutory dividend capacity for the industry as a whole. For the 13 large, publicly held life insurance companies used in the study, average statutory interest coverage is expected to be approximately 3.3 times (x) in 2014, down modestly from approximately 3.4 times (x) in 2013.

The report 'U.S. Life Insurance Statutory Dividend Capacity' i available on the Fitch web site at 'www.fitchratings.com.'

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: U.S. Life Insurance Statutory Dividend Capacity (Improved Statutory Dividend Capacity a Credit Positive)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749694

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