A.M. Best Affirms Ratings of UNIFI Companies

A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of "a+" of Ameritas Life Insurance Corp. (Ameritas Life) (Lincoln, NE), Ameritas Life Insurance Corp of New York (New York, NY), Acacia Life Insurance Company (Acacia Life) (headquartered in Bethesda, MD) and The Union Central Life Insurance Company (Union Central) (headquartered in Cincinnati, OH). Additionally, A.M. Best has affirmed the FSR of A- (Excellent) and ICR of "a-" of Brokers National Life Assurance Company (BNLAC) (headquartered in Austin, TX). Concurrently, A.M. Best has affirmed the debt rating of "a-" on the $50 million 8.20% surplus notes, due 2026 of Union Central. These insurance entities comprise the life/health operations of UNIFI Companies (UNIFI) (Lincoln, NE). The outlook for all ratings is stable.

The affirmations primarily reflect UNIFI's strong balance sheet, solid levels of risk-adjusted capitalization across the insurance entities and favorable operating results within its core ordinary life and group dental insurance lines of business. UNIFI maintains only a modest level of intangible assets and has good financial flexibility with minimal financial leverage. The company also maintains the ability to issue debt due to its mutual holding company structure. In addition, the group has experienced a noticeable increase in top line growth in recent periods, particularly within its traditional whole life and variable annuity products lines. A.M. Best also notes that UNIFI maintains a favorable business profile complemented by a unified branding strategy, improved economies of scale and a broad portfolio of individual life, individual annuity, disability income, retirement plan, dental and vision products.

Partially offsetting these positive rating factors is the overall decline in UNIFI's operating results over the most recent period due to spread compression in its interest-sensitive lines of business, lack of scale in its retirement plans division and a considerable decline in assets under management at its Calvert Investments, Inc. (Calvert) subsidiary. In addition, UNIFI is now subject to additional regulatory oversight as a bank holding company due to its ownership of Acacia Federal Savings Bank.

Factors that could result in positive rating movement for UNIFI include an increase in its overall earnings together with improved operating performance at Calvert and continued overall top line growth. Factors that may result in negative rating movement include significant investment losses, a material deterioration in operating results or a sharp decline in the operating performance of Acacia Federal Saving Bank.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Rating Members of Insurance Groups"; "Understanding BCAR for Life/Health Insurers"; and "A.M. Best's Liquidity Model for U.S. Life Insurers." Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.