AM Best affirms USAA ratings with stable outlook

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AM Best affirms USAA ratings

Highlights

AM Best affirms USAA’s A++ Financial Strength Rating and 'aaa' Long-Term Issuer Credit Ratings for subsidiaries and debt programs, all with stable outlooks.
USAA Group maintains industry-leading balance sheet strength and improved operating performance, benefiting from recent rate hikes and lower catastrophe losses in 2025.
USAA Life Group continues direct premium growth and sustained profitability, receiving $300 million capital support from the parent in 2025 for expansion.

Rating action covers insurance units and debt programs

As reported by AM Best, the agency affirms the Financial Strength Rating of A++ and the Long-Term Issuer Credit Ratings of "aaa" for USAA and its property/casualty and life/health subsidiaries, while also affirming the Long-Term Issuer Credit Rating and Long-Term Issue Credit Rating of "aaa" for USAA Capital Corporation's medium-term note program and senior unsecured medium-term notes. It also affirms the Short-Term Issue Credit Rating of AMB-1+ for the company's commercial paper program, with stable outlooks across all ratings.

The affirmed insurance entities include USAA Casualty Insurance Company, USAA General Indemnity Company, USAA Limited in the UK, USAA County Mutual Insurance Company, USAA Life Insurance Company and USAA Life Insurance Company of New York. AM Best also affirms "aaa" ratings on USAA Capital Corporation's $500 million 5.25% senior unsecured medium-term notes due 2027, $500 million 4.375% notes due 2028 and $400 million 2.125% notes due 2030, as well as the indicative rating on its senior unsecured medium-term note program.

Operating trends support capital and business profile

AM Best says the USAA Group's ratings reflect balance sheet strength assessed at the strongest level, alongside strong operating performance, a very favorable business profile and appropriate enterprise risk management. The agency adds that the property/casualty group remains strategically integral to the wider USAA organization because of its historical contribution.

USAA serves 14.3 million members through property/casualty and life/health insurers, as well as other financial services through USAA Federal Savings Bank. The group ranks among the top 10 writers of personal lines products in the U.S. by premiums written, including private passenger auto and homeowners insurance.

AM Best says operating performance improves in recent years, helped by rate increases and underwriting and claims actions to manage volatility. In 2025, results benefit from lower net catastrophe losses and favorable non-catastrophe loss trends in personal auto and homeowners lines, while technology investment and direct-to-consumer marketing keep expense ratios well below AM Best's personal lines composite average.

For the life business, AM Best says USAA Life Group shows very strong balance sheet strength, strong operating performance, a favorable business profile and appropriate risk management. The agency notes continued direct premium growth, ongoing profitability and $300 million of capital support from the parent company in 2025 to back future expansion.

Our earlier article on retirement income security and annuity options in U.S. workplace plans explained that interest in guaranteed-income features is rising, but adoption in employer-sponsored target-date funds remains limited. We also noted that assets in target-date strategies with annuities have been growing and that regulatory proposals and large financial firms’ product expansion could accelerate broader use, despite ongoing concerns about cost, liquidity, and complexity.

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