Best believes AFLIAC
may encounter challenges in building its annuity book of business, namely re-establishing former business relationships and building new ones in an industry where a number of new entrants with low cost structures are also competing for business.
The reinsurance transaction by AFLIAC
will be entirely funded by The Goldman Sachs Group, Inc.
On October 7, 2002, AFC announced that going forward, FAFLIC and AFLIAC
will discontinue new sales and will focus on servicing their current blocks of business.
Historically, Fitch considered the credit profiles of AFC's property/casualty subsidiaries and FAFLIC and AFLIAC
to be loosely linked.
Fitch does not expect to take further rating actions concerning AFC, FAFLIC or AFLIAC
as a result of its comprehensive review of all ratings for North American life insurance companies.
The Stable Rating Outlook reflects Fitch's belief that FAFLIC and AFLIAC
will maintain current risk-adjusted capital levels and that AFC's 2002 operating performance will improve relative to 2001.
In addition to FAFLIC and AFLIAC
, AFC has a property/casualty operation led by The Hanover Insurance Companies (Hanover) and Citizens Insurance Company of America (Citizens).