A.M. Best Affirms Ratings of AMEX Assurance Company
OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating of āaā of AMEX Assurance Company (AMEX Assurance) (Chicago, IL). AMEX Assurance is a wholly owned subsidiary of American Express Company (American Express) (New York, NY) [NYSE: AXP]. The outlook for both ratings is stable.
The ratings reflect AMEX Assuranceās strong capital position and continued trend of favorable earnings generated by providing insurance products to American Express Cardmembers. Offsetting these positive rating factors is AMEX Assuranceās limited business scope, as the majority of its products are primarily confined to American Express Cardmembers, and over the past five years, all of AMEX Assuranceās prior yearsā net income has been returned to American Express through stockholder dividends.
AMEX Assuranceās strong capital position is reflective of its conservative investment risk profile and favorable operating results from efficient operations that drove its profit margins. The favorable operating results reflect the companyās low-cost, direct marketing strategy and its emphasis on travel-related and other ancillary insurance coverages offered exclusively to American Express Cardmembers. During a transition period following AMEX Assuranceās temporary spin off from American Express in 2005, operating income was derived entirely from investment income and ceding commissions. However, since being reacquired by American Express in September 2007, the company has generated its consistent trend of strong income from underwriting and investments.
The principal methodology used in determining these ratings is Bestās Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Bestās rating process and highlights the different rating criteria employed. Additional key criteria utilized include: āRisk Management and the Rating Process for Insurance Companiesā; āA.M. Bestās Ratings & the Treatment of Debtā; āUnderstanding BCAR for Property/Casualty Insurersā; āNatural Catastrophe Stress Test Methodologyā; and āCatastrophe Analysis in A.M. Best Ratings.ā Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
A.M. Best Company
Analysts
Michael Russo, 908-439-2200, ext. 5372
[email protected]
or
Rick Decker, 908-439-2200, ext. 5423
[email protected]
or
Public Relations
Rachelle Morrow, 908-439-2200, ext. 5378
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
[email protected]
Source: A.M. Best Company
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