A.M. Best Affirms Ratings of Zurich American Life Insurance Company and Farmers New World Life Insurance Company
The ratings for ZALICO reflect its growing strategic importance to the ZIG GLNA segment in offering life and annuity products to the affluent private placement market and global employee benefits market. The ratings recognize strong top line revenue growth and profit emergence at the consolidated group level from new business margins. The ratings also reflect the high credit quality of ZALICO’s investment portfolio which contributes to favorable risk-adjusted capitalization. Reinsurance is used extensively with affiliated reinsurers such as
The ratings for FNWL reflect an overall level of contribution to ZIG GLNA in terms of premiums and new business margins given its operating profile that is material to ZIG GLNA. Risk-adjusted capitalization remains adequate to support insurance, investment and business risks and is enhanced by utilization of affiliated reinsurance with ZIC. The overall credit quality of FNLW’s investment portfolio remains sound despite higher allocations to less liquid asset classes, including private placements and commercial mortgages to improve portfolio yields. Partially offsetting rating factors include positive, albeit lower statutory operating earnings trends, and ongoing spread compression given high interest rate sensitivity associated with high minimum guaranteed crediting rates. Additionally, FNWL faces ongoing challenges in growing its distribution channel while improving persistency, particularly within life insurance.
The ratings for UULIC reflect its strong risk-adjusted capitalization, positive operating trends and overall good credit quality of invested assets. Partially offsetting factors include lack of top-line growth given its run off business profile.
This press release relates to rating(s) that have been published on
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