Moody's cuts Ohio National view to negative

Moody's Investors Service said it affirmed the A1 insurance financial strength ratings of Ohio National Life Insurance Co. and Ohio National Life Assurance Corp., the core insurance subsidiaries of Ohio National Financial Services, Inc. (Ohio National).

Moody's also affirmed Ohio National's Baa1 senior debt rating. The outlook for the ratings of Ohio National and its subsidiaries was changed to negative from stable.

According to Moody's assistant vice president Shachar Gonen, "The affirmation of the ratings of Ohio National and its subsidiaries largely reflects the company's strong capital position, bolstered by the proceeds from its April 2011 debt issuance; well managed variable cost distribution; and a stable block of inforce life insurance."

The company's financial profile also benefits from a conservative investment portfolio with minimal exposure to higher risk asset classes such as equities, alternative investments, and CMBS; under a stress scenario, the investment portfolio is expected to perform well relative to peer companies in terms of its impact on capitalization.

Commenting on the change in outlook to negative, Moody's said it is primarily driven by Ohio National's higher risk profile due to rapid growth and concentration in variable annuities with guarantees relative to its other businesses.

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