Fitch Anticipates No Rating Action on Symetra IPO Announcement

Fitch's key concerns surrounding the transaction include determining how proceeds from the offering will be used given the company's recent growth and anticipated need for capital support. Additionally Fitch will monitor how the company manages its capital going forward given management's intention of providing a shareholder dividend and managing other shareholder needs.

Fitch's current ratings for SFC and its subsidiaries reflect the company's strong balance sheet and capitalization, diverse business mix and good profitability. Additional strengths include the company's recent growth in its retirement business and solid competitive position in the group medical excess-loss niche market.

Fitch assigned a Negative Rating Outlook to Symetra in February 2009 based on the company's exposures to financial markets and Fitch's view that the difficult economic environment while somewhat improved, will continue. The Negative Outlook also considers Fitch's expectation for additional investment losses in the next 12-18 months according to Fitch's core stress analysis.

Based on an updated review of Symetra's $18.4 billion investment portfolio using Fitch's stress testing methods, Fitch projects investment losses to be less than 1.2% of invested assets, or within expectations. Symetra's investment loss exposure is primarily driven by the company's exposure to corporate bonds.

Fitch's key ratings concerns include challenges in the near-term to maintain total earnings growth in light of ongoing difficult economic conditions. In addition, Fitch believes Symetra will be continually challenged with the earnings volatility in its group excess loss business. However, that volatility is increasingly offset by growth in the company's retirement and life sales which provide steady earnings.

Symetra is a privately held insurance holding company based in Bellevue, Washington. Symetra Life, the main operating company reported $20.2 billion in total assets and $1.3 billion in adjusted surplus as of June 30, 2009.

Fitch currently rates Symetra and its subsidiaries as follows with a Negative Outlook:

Symetra Financial Corp.

--Issuer Default Rating 'A-'.

Symetra Life Insurance Co.

--Insurer Financial Strength (IFS) 'A+'.

First Symetra National Life Insurance Company of New York

--IFS 'A+'.

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SOURCE: Fitch Ratings

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