Fitch Ratings Inc. lowered its credit ratings on Newport Beach-based Pacific Life Insurance Co. and its parent company and predicts more investment losses for the life insurer.
New York-based Fitch took Pacific Life and its parent down a notch in its general ratings and for specific debt the company has out.
Fitch’s new ratings for Pacific Life still are well within what is considered investment grade or high quality.
Pacific LifeCorp, a holding company for Pacific Life Insurance, saw its long-term issuer default rating drop to “A-“ from “A.”
The company said it lowered its ratings because of the prospect of weaker earnings, added debt and the prospect of investment losses.
Pacific Life is the county’s largest privately held company with yearly revenue of $5.2 billion.
The company offers life insurance policies and investments for individuals and companies, counting more than half of the 100 largest U.S. companies as customers.
It also runs Aviation Capital Group, which leases jets to airlines.
Premiums collected make Pacific Life a big investor in stocks, bonds and other assets.
Fitch said it expects “continued deterioration in the commercial real estate market,” which could impact Pacific Life’s investments.
Pacific Life holds owns commercial real estate as well as bonds based on commercial real estate mortgages. It also holds bonds based on home loans.
The company could see investment losses of $345 million to $545 million this year, according to Fitch.
In 2007 and 2008, Pacific Life lost about $13 billion in investments.
It now has about $90 billion in assets.
Fitch called its investment loss scenario for 2010 “manageable.”
Pacific Life’s “liquidity appears sound both from a holding company and insurance operating company perspective,” it said.
