A.M. Best Revises Outlook to Stable for SPJST

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating of B (Fair) and issuer credit rating of “bb” of SPJST (The Society) (Temple, TX).

The revised outlook for SPJST reflects an increase in unassigned funds, which is attributable to the company’s improved profitable operating performance, as well as an improvement in its investment portfolio in 2010. The Society continues to report premium growth in both of its core individual annuity and ordinary life lines of business. Additionally, SPJST enjoys its long-standing fraternal role of providing financial products and fraternal benefits to its membership base, which is available to everyone in Texas.

Despite an improvement in the investment portfolio, A.M. Best remains concerned over SPJST’s large exposure to mortgage loans and equities, its increased level of interest-sensitive fixed annuities and the underlying spread compression risk and a further decline in its NAIC risk-based capital ratio.

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”; and “Assessing Country Risk.” Methodologies 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 © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Company
Jason Hopper, 908-439-2200, ext. 5016
Financial Analyst
jason.hopper@ambest.com
or
Raj Shah, 908-439-2200, ext. 5409
Assistant Vice President
raj.shah@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Source: A.M. Best Company