AM Best Comments on Credit Ratings of Protective Life Corporation and Its Subsidiaries Following Announced Reinsurance Agreement

AM Best has commented that the Credit Ratings of Protective Life
Corporation (Protective) (headquartered in Birmingham, AL) and its
insurance subsidiaries remain unchanged following the announcement that
it has entered into a reinsurance agreement to acquire approximately
$20.0 billion of life and annuity liabilities of insurance subsidiaries
of Great-West Lifeco, Inc. (Great-West).

Under the terms of the agreement, Protective, whose ultimate parent is
Dai-ichi Life Holdings, Inc., will enter into a reinsurance agreement
with Great-West for a seasoned block of life and annuity business, using
a combination of excess capital, debt and a capital contribution from
Dai-ichi Life Holdings, Inc., to fund the transaction. The acquisition
is part of Protective’s core business strategy as an acquirer of life
insurance blocks and adds balance to Protective’s recently acquired
annuity block from Liberty Life Assurance Company of Boston as the
liabilities are primarily universal life and whole life, including a
large block of corporate-owned and bank-owned life insurance, and a
moderate amount of annuities.

While the impact to Protective’s balance sheet is material given the
size of the acquired blocks, AM Best notes that risk-adjusted
capitalization will remain supportive of Protective’s current ratings.
AM Best expects the acquisition to add diversification and scale to
Protective’s existing acquired blocks with a moderate overall increase
to operating earnings. Financial leverage and interest coverage are
expected to remain within AM Best’s expectations for the current rating
levels. The transaction is expected to close in the second quarter of
2019, pending regulatory approval and other customary closing conditions.

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 Understanding
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 rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
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