A.M. Best Assigns Ratings to American Retirement Life Insurance Company

A.M. Best Co. has assigned a financial strength rating (FSR) of B++ (Good) and issuer credit rating (ICR) of "bbb+" to American Retirement Life Insurance Company (ARLIC), a subsidiary of Loyal American Life Insurance Company (Loyal) (Cincinnati, OH), which in turn is indirectly owned by Great American Financial Resources, Inc. (GAFRI), a wholly owned subsidiary of American Financial Group, Inc. (NYSE: AFG). The outlook assigned to both ratings is stable (see also A.M. Best Co.).

The rating action on ARLIC reflects the benefits it receives from the financial strength and operating profile of GAFRI, which provides administrative expertise and expanded distribution capacity for the future growth of the company's product lines. In addition, the rating considers the quality of ARLIC's investment portfolio, which is focused on publicly traded, investment grade, fixed income securities.

A.M. Best remains concerned that the individual health business, primarily Medicare supplement coverage, will make up the majority of ARLIC's future premium income and expose the company to the considerable regulatory and competitive pressures associated with this business.

The principal methodology used in determining these ratings is Best's Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding BCAR for Life and Health Insurers"; "Rating Members of Insurance Groups"; and "Rating New Company Formations." 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.