A.M. Best Affirms Ratings of OneAmerica Financial Partners, Inc. and its Subsidiaries
The rating affirmations reflect OneAmerica’s growing business profile, with a top-five market share in whole life insurance and strong position within Asset-Care, its hybrid life product with long-term care benefits. OneAmerica continues to demonstrate strong growth in assets under administration primarily due to three acquisitions made since 2010 within its Retirement Services segment and to a lesser extent, its recent entry into the Pension Risk Transfer marketplace. OneAmerica maintains a strong risk-adjusted capital position, as measured by Best’s Capital Adequacy Ratio (BCAR). OneAmerica’s investment risk profile is well-managed, with lower below investment grade bond exposure, strong issuer credit diversification and a well-performing commercial mortgage loan portfolio. OneAmerica’s mutual holding company structure facilitates a strategy focused on long-term financial strength supported by good surrender charge protection in its liability structure and minimal equity market exposure.
Partially offsetting rating factors include a modest reduction in OneAmerica’s absolute capital (although risk-adjusted capital remains stable) as a result of dividends upstreamed to its parent. OneAmerica also will need sizeable technological investments in systems infrastructure to realize efficiencies of scale over time, and this carries potential execution risk. As a result,
Positive rating action could occur over time if OneAmerica’s management continues to execute on integrating its recent acquisitions and translates its existing strategy into profitable premium and earnings growth that contributes to a material increase in risk-adjusted capital. A negative rating action could be taken if spending increases fail to drive expected synergies, or if operating profit continues to decline. A negative rating action also could be taken if risk-adjusted capital continues to decline, either from large increases in spending or poor operational performance, or if the parent organization’s financial condition deteriorates significantly.
The following issue ratings have been affirmed:
American United Life Insurance Company—
-- “a” on
-- “a-” on
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS RESERVED.
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