A.M. Best Upgrades Issuer Credit Rating of Great Western Insurance Company
The rating upgrade of the Long-Term ICR reflects GWIC’s well-established niche position as a pre-need life insurance company, adequate level of risk-adjusted capitalization, favorable investment portfolio yield and generally positive operating trends. Partially offsetting rating factors are a historically limited business profile coupled with higher levels of investment risk relative to capital, and lack of historical experience in its relatively new business segment of group annuity funding agreements (GAFA).
GWIC is a prominent insurer in the pre-need space through its extensive funeral home distribution network targeting the growing senior population. GWIC continues to report positive operating earnings, which historically have benefited from an effective underwriting process and prudent expense management. Recent income volatility is due mostly to new business strain from the final expense block of business. Growth in invested assets from the GAFA product, which is a funding vehicle for high deductible health savings accounts, contributes to healthy investment spreads, which
Historically, GWIC's business profile has been modest with limited geographical diversification and an exclusive reliance on pre-need insurance products; however, GWIC is expanding geographically and adding a final expense product to its product portfolio.
Key rating factors that could lead toward a negative rating action include negative premiums and earnings trends leading to a material decline in risk-adjusted capital, or if
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and
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A.M. Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of Western Life Assurance Company
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