AM Best Affirms Credit Ratings of Insurance Subsidiaries of OneMain Holdings, Inc.

AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of "bbb" (Good) of American Health and Life Insurance Company (AHLIC) and Triton Insurance Company (Triton) (both domiciled in Fort Worth, TX). Both companies are wholly owned subsidiaries of OneMain Holdings, Inc. (OneMain) [NYSE: OMF] (headquartered in Evansville, IN). The outlook of these Credit Ratings (ratings) is stable.

The ratings of AHLIC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). AHLIC's ratings also reflect drag from the parent company, OneMain, a consumer finance company, which has considerable financial leverage within AM Best's measurement. AHLIC and Triton are dependent on OneMain as a primary distribution source, and both insurance companies continue to have significant concentration in credit insurance products. AHLIC also provides term life insurance, which adds some diversity to its relatively narrow portfolio of products. AHLIC has maintained the strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), and generates consistent, favorable operating performance relative to peers and industry benchmarks.

The ratings of Triton reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate ERM. Triton's ratings also reflect a drag from OneMain. Triton maintains the strongest level of risk-adjusted capitalization, as measured by BCAR. Triton has generated strong operating results in the last three years, which followed significant volatility in premium volume and incurred losses in 2020, due to the economic and financial impact of COVID-19 on its main product, involuntary unemployment insurance.

In addition, AM Best considers AHLIC's and Triton's financial constraints in terms of dividends in the ratings, as these constraints may stress risk-adjusted capitalization in the future. Both companies paid extraordinary dividends in 2023, while managing target capital levels.

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