A.M. Best Affirms Ratings of Security Benefit Life Insurance Company and Its Affiliate [Manufacturing Close – Up]
Proquest LLC |
Both companies are the subsidiaries of
The rating actions reflect Security Benefit Life's positive earnings trends, favorable risk-adjusted capitalization, new premium growth as a result of its enhanced business profile and distribution network, as well as the benefits of the investment expertise of
Security Benefit Life has benefitted from the corporate, financial and investment management expertise provided to it by
The challenges facing Security Benefit Life include maintaining sufficient risk-adjusted capitalization to support its rapid growth of fixed indexed annuity sales, managing increased holdings in potentially riskier asset classes, such as structured securities and other invested assets and holding general account reserves that are comprised almost entirely of interest-sensitive products, which could impact spreads if interest rates change, although the organization does monitor closely the duration of its assets and liabilities.
Factors that could lead to positive rating actions include a stable risk-adjusted capitalization that is commensurate with higher expected growth, greater diversification in product mix and a consistent earnings trend. Factors that could lead to negative rating actions are Security Benefit Life having an increase in its exposure to higher risk assets to support spread margin, a decrease in its risk-adjusted capitalization due to operating results and unfavorable investment performance, as well as continued accelerated growth in its fixed-indexed annuity liabilities.
The following debt ratings have been upgraded:
-- to "bbb-" from "bb+" on
-- to "bbb-" from "bb+" on
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides an explanation of
More Information:
Best's Credit Rating Methodology:
http://www.ambest.com/ratings/methodology
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A.M. Best Revises Outlook to Negative for the Members of Columbian Financial Group [Manufacturing Close – Up]
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