OnePath Life has had its “A+” financial strength and issuer credit rating placed on CreditWatch with negative implications by rating agency S&P Global, following its sale to its new parent.
On November 30, the sale of ANZ Bank New Zealand’s OnePath Life to Cigna Corp was completed.
According to S&P, it considers that Cigna is likely to provide support to the newly acquired insurance business given that its services are complementary to Cigna’s existing capabilities and international strategy, and further strengthens Cigna’s existing operations in New Zealand.
“The ratings on OPLNZ reflect the insurer’s strong competitive position and strong capital and earnings position, which we view as ongoing under Cigna ownership,” it said. “The ratings include a one-notch uplift above its ‘a’ stand-alone credit profile due to expected group support if required.”
S&P noted it intends to resolve the CreditWatch within the next three months once Cigna gains required regulatory approvals for the proposed acquisition of pharmacy benefit manager Express Scripts Holding Co (ESI).
“After regulatory approvals are granted for the Cigna ESI merger, we may downgrade Cigna’s insurance operating companies to ‘A’ from ‘AA-’, and subsequently OPLNZ to ‘A’ from ‘A+’,” it added.