A.M. Best Improves Ratings of Zurich American Life Insurance Company [Health & Beauty Close – Up]

Proquest LLC

<p lede="true">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 Zurich American Life Insurance Company (ZALICO).

The outlook for both ratings is stable.

The Company said that the rating upgrades of ZALICO (formerly known as Kemper Investors Life Insurance Company) reflect A.M. Best's view of its enhanced strategic role and the significant reinsurance support provided within Zurich Insurance Group (ZIG). ZIG has focused on expansion in the U.S. life insurance segment by initially targeting the highly competitive affluent market for individual life products and the corporate market for group products. The rating upgrades also consider ZALICO's favorable risk- adjusted capitalization, which reflects the reinsurance support for its legacy products including business owned life insurance that is reinsured by affiliate, Zurich Insurance Bermuda Branch.

Offsetting rating factors include ZALICO's declining level of statutory capitalization and fluctuating operating earnings in recent years due to the surplus strain associated with implementing its new business strategy and associated new business growth. A.M. Best noted that it believes the company's operating performance will remain challenged until it benefits from growth and scale from its new business strategy.

Given the upgrades, ZALICO is well positioned at its current rating level for the foreseeable future. A.M. Best added that factors that may lead to future negative rating actions include a change in the Company's view of the support from ZIG, a material decline in capitalization or risk-adjusted capitalization or a weakened earnings trend.

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.