|Business Wire, Inc.|
Primerica Life's rating is supported by the company's solid risk adjusted capitalization, strong competitive position in the individual term insurance market, efficient captive distribution force, conservative asset profile, and good operating performance. Partially offsetting these positives are Primerica Life's narrow product profile and the size of its in-force block of term life insurance, which was materially reduced through a series of reinsurance treaties the company entered into prior to its initial public offering on
Fitch views Primerica Life's consolidated profitability to be good in the quarters following its separation from Citigroup. The company's earnings continue to reflect its conservative new business pricing which supports its strong margins. For the first three months of 2012, Primerica, Inc., Primerica Life's parent company, reported consolidated pretax operating income of
Primerica Life's risk-based capitalization (RBC ratio) declined significantly to 426% of company action level at
In addition, on
Fitch views Primerica Life's unique distribution force as a competitive advantage which has been an important factor in the company's strong record of profitability. Fitch believes that a material weakening of this channel could adversely affect Primerica Life's operating performance and its rating.
Primerica Life remains one of the nation's largest individual term life insurance writers, with nearly
Key rating triggers that could result in an upgrade include:
--sustained improvement in statutory net operating gain over the next 12-to-18 months.
The key rating triggers that could result in a downgrade include:
--a sustained decline in RBC below 400%;
--a sustained increase in parent leverage as measured by debt-to-total capital above 25% or TFC ratio above 1.2x;
--a material decline in the effectiveness of the company's distribution channel.
Fitch affirms the following rating with a Stable Rating Outlook:
--IFS at 'A+'.
Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
--'Insurance Rating Methodology' (
Insurance Rating Methodology
Source: Fitch Ratings
|Copyright:||Copyright Business Wire 2012|