Navy Mutual is proud to announce that the Fitch Ratings credit rating agency affirmed our A+ rating in December 2020. For 17 years in a row, we have received this same A+ rating from Fitch, signifying our financial strength and stable outlook.
“Interest rates at historic lows and for the foreseeable future have made for challenging market conditions for the insurance industry. Navy Mutual continues our tradition of service while adapting and innovating to face these challenges. Every year we invite Fitch to take a hard look at our financials and investment portfolio,” said Navy Mutual President and CEO, retired Rear Admiral Brian Luther, USN. “Once again, they have affirmed our A+ rating and stable outlook, providing assurance of our financial strength. I am proud of this rating. It means we will be there for our Members and their families when needed most.”
Fitch Ratings is a global leader in credit ratings and research and conducts annual, independent reviews of financial service providers to help consumers and investors make informed decisions about the financial strength and stability of rated organizations. In other words, a high letter grade should signal confidence for consumers in doing business with a company.
To expand, credit rating agencies evaluate the financial strength of organizations to determine their ability to meet their financial obligations, the most important of which are the ones we owe to you, our Members, and your beneficiaries. Our A+ rating is Fitch’s determination that we have a strong capacity to meet our obligations despite historically low interest rates.
While 2020 has been a good year to invest in the stock market, the National Association of Insurance Commissioners and the Virginia Insurance Commission limit the amount of equity that a life insurer may hold to ensure the ongoing financial strength of the company. Consistent with other highly rated insurers, we allocate some of our portfolio to equity, but most of our assets consist of investment grade fixed-income securities. To ensure that our portfolio generates requisite returns, we invest in bonds with long maturities, often exceeding 20 years. Therefore, only a small portion of the portfolio needs to be reinvested each year, which minimizes our exposure to today’s low interest rates. As a result, our portfolio yield in 2020 was well above industry average, an admirable result given the high credit quality of our holdings.
With over $3 billion in assets and one of the strongest balance sheets in our peer universe, we stand by our ability to pay out claims and protect our Members. The A+ rating is the highest rating that Fitch Ratings can award a company of Navy Mutual’s size and focus. It reflects Navy Mutual’s solid financial foundation, conservative investment strategy, lower-than-industry-average product risk, and very strong capitalization. This means that you can be sure that, should you or your family need to file a claim after the death of a loved one, we will be more than equipped and prepared to honor it.
Learn more about Navy Mutual’s latest financial strength rating here.