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Primerica Life's rating is supported by the company's good 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 the company'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
Following the reserve financing transaction, Primerica Life received regulatory approval for the payment of an extraordinary dividend to Primerica in the amount of
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 12 months ended
Primerica Life's risk-based capitalization declined significantly to 426% of company action level at
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 the company's operating performance and its rating.
Primerica Life remains one of the nation's largest individual term life insurance writers, with nearly
The 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 issuer did not participate in the rating process other than through the medium of its public disclosure. The ratings above were unsolicited and have been provided by Fitch as a service to investors.
--'Insurance Rating Methodology' (
Insurance Rating Methodology
Source: Fitch Ratings
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