Category: FNF

FNF – AM Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of Aspida Life Re Ltd.

OLDWICK, N.J.–()–AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Aspida Life Re Ltd. (Aspida Re) (formerly known as F&G Reinsurance Ltd.) (Bermuda). Aspida Re is a subsidiary of Aspida Holdings Ltd., which is an indirect subsidiary of Ares Management Corporation (Ares Management). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Aspida Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The ratings were placed under review with developing implications on Oct. 7, 2020, following the announcement that Fidelity National Financial, Inc (FNF) and its subsidiary Fidelity & Guaranty Life Insurance Company [NYSE: FNF], a leading provider of annuities and life insurance, had entered into a definitive agreement to sell F&G Reinsurance Ltd. to Aspida Holdings Ltd.

The rating actions follow the close of the transaction on Dec. 18, 2020, and include AM Best’s assessment of Aspida Re’s business strategy and capitalization, as well as risk management capabilities, going forward. AM Best expects that Aspida Re will maintain a very strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), with the support of its parent and potential future investors as it executes its strategy of engaging in reinsurance flow transactions and block acquisitions of primarily interest-sensitive annuity business. AM Best notes that Aspida Re plans to utilize the investment expertise of its parent, Ares Management, a leading alternative investment manager with almost $200 billion of assets under management, to restructure the portfolio in order to improve investment yields. While AM Best acknowledges the favorable track record and extensive investment experience of Ares Management, exposure to less liquid and somewhat higher risk investments in Aspida Re’s general account are expected to be somewhat elevated compared with industry averages.

AM Best believes that Aspida Re maintains an adequate risk management framework for its current risk profile, which includes investment risk tolerances and prudent asset-liability management, as well as good risk controls and stress testing capabilities. However, as a new company, AM Best believes that execution risks remain and will continue to monitor Aspida Re’s ability to appropriately price future reinsurance treaties and block acquisitions.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

FNF – Why FNF Group (FNF) Might be Well Poised for a Surge

FNF Group (FNF Free Report) could be a solid addition to your portfolio given a notable revision in the company’s earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

Analysts’ growing optimism on the earnings prospects of this provider of title insurance and mortgage services is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool — the Zacks Rank — is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For FNF Group, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $1.21 per share, which is a change of +65.75% from the year-ago reported number.

Over the last 30 days, one estimate has moved higher for FNF Group compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 32.97%.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $4.83 per share, representing a year-over-year change of -9.55%.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for FNF Group. Over the past month, two estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 7.57%.

Favorable Zacks Rank

Thanks to promising estimate revisions, FNF Group currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

FNF Group shares have added 5.4% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.