August 6, 2024 Reinsurance

AM Best Assigns Credit Ratings to American Century Life Insurance Company

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb+” (Good) to American Century Life Insurance Company (American Century) (Columbus, Ohio). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect American Century’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

American Century’s strong level of balance sheet strength is underpinned by its risk-adjusted capitalization being assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects American Century’s risk-adjusted capitalization to remain at the strongest level prospectively. Although American Century has an elevated portion of invested assets allocated toward mortgage loans, the company’s bond portfolio is comprised of primarily NAIC 1 securities.

American Century’s operating performance is assessed as adequate. Consistent operating and net earnings have been reported over at least the latest five-year period. Earnings are driven by the spread of the company’s annuity offerings.

American Century is licensed to operate in 40 states, with its premium and distribution concentrated in Texas, where the company was domiciled prior to 2023. The company, now domiciled in Ohio, currently offers two products: a single premium deferred annuity and a single premium immediate annuity. Products are mainly distributed through the independent agency channel.

The company’s ERM is assessed as appropriate, with the management team monitoring and addressing risks quickly, as they arise. While the company does not currently make use of reinsurance, it does utilize a number of third-party vendors in operations.

Negative rating actions could occur if there is a material deterioration in American Century’s balance sheet strength such that it no longer supports the strong assessment. Positive rating actions, while unlikely, could occur if the company’s operating metrics remain profitably above industry averages as the company gains scale. AM Best will closely monitor American Century’s results.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.