OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has upgraded the financial strength rating (FSR) to
A (Excellent) from A- (Excellent) and issuer credit rating (ICR) to “a”
from “a-” of Foresters Life Insurance Company(Foresters Life)
(Mississauga, ON). Concurrently, A.M. Best has affirmed the FSR of A
(Excellent) and ICR of “a+” of The Independent Order of Foresters
(Foresters) (Toronto, ON). A.M. Best also has affirmed the FSR of A-
(Excellent) and (ICR of “a-” of First Investors Life Insurance Company
(FIL) (New York, NY). The outlook for all ratings is stable.
Foresters’ ratings reflect its long-established fraternal and insurance
presence in the Canadian and U.S. marketplace, its strong risk-adjusted
capitalization as measured by Best’s Capital Adequacy Ratio and positive
operating results, despite the continued low interest rate environment.
Foresters has a strong affinity with its membership base through its
charitable programs and competitive portfolio of life insurance and
Partially offsetting these positive rating factors are Foresters’
top-line challenges to organically sustain new membership growth, its
strained operating earnings in the United States market due to low
interest rates and the challenges in the competitive Canadian
The upgrading of the ratings for Foresters Life reflects the enhanced
importance the company has to Foresters. This is demonstrated by the
increased marketing and expense synergies that Foresters Life has with
Foresters and its role in increasing the group’s revenue contribution
from the Canadian market. Foresters Life continues to be positioned as
the strategic marketing arm for Foresters’ life insurance operations in
Canada following its acquisition in 2008. In January 2012, the company’s
name was changed from Unity Life to Foresters Life in order to leverage
the marketing and branding strength of its parent. Going forward, A.M.
Best expects Foresters Life to continue to benefit from the financial
strength and implied support of Foresters’ fraternal organization.
Partially offsetting these positive rating factors are the challenges
Foresters Life faces in organically growing premium due to the
competitive Canadian insurance marketplace and the current low interest
rates, which have decreased earnings for the year.
FIL is a recently acquired life subsidiary under Foresters, which
markets life insurance and variable and fixed annuities in the United
States. FIL enables Foresters to benefit from both product and
geographic diversification. FIL operates as a stand-alone entity in the
Foresters’ U.S. division.
These favorable rating factors are partially offset by Foresters’
relative inexperience in owning a variable product issuer and the
challenges associated with managing a privately held entity in a
fraternal structure and culture.
A.M. Best believes that Foresters is well positioned at its current
rating level. Key rating drivers that may lead to negative rating
actions include sustained deterioration in the company’s operating
performance, capital erosion due to investment losses or heightened risk
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Key criteria utilized include: “Risk
Management and the Rating Process for Insurance Companies”; “Rating
Members of Insurance Groups”; and “Understanding BCAR for Life/Health
Insurers.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.Eva SverdlovaFinancial Analyst(908)
439-2200, ext. email@example.comRichard
McMillanAssistant Vice President(908)
439-2200, ext. firstname.lastname@example.orgRachelle
MorrowSenior Manager, Public Relations(908)
439-2200, ext. email@example.comJim
PeavyAssistant Vice President, Public Relations(908)
439-2200, ext. firstname.lastname@example.org
Source: A.M. Best Co.