A.M. Best Improves Ratings of Universal Underwriters Life Insurance Company [Professional Services Close – Up]

Proquest LLC

A.M. Best Co. reported that it has upgraded the financial strength rating to A from A- and issuer credit rating to "a" from "a- " of Universal Underwriters Life Insurance Company (UULIC).

The outlook for both ratings is stable.

According to the Company, the ratings of UULIC reflect its role and the reinsurance support provided within Zurich Insurance Group (ZIG), to support its U.S. expansion while targeting the highly competitive affluent marketplace UULIC operates in. In addition to affluent markets, UULIC also provides the administration infrastructure and support in the corporate market for group benefits products.

Offsetting these strengths is the significant decline in capitalization. While UULIC remains adequately capitalized, A.M. Best said that it had been over capitalized for its risk profile and capital was recently re-deployed within the ZIG organization. Other offsetting factors include a declining earnings trend and the execution risk associated with the continued development and implementation of its new business profile.

UULIC is well positioned at its current rating level for the foreseeable future. The Company noted that factors that may lead to future negative rating actions include a change in support from ZIG, a material decline in capitalization or risk-adjusted capitalization or earnings trends.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides an explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process.