A.M. Best Revises Outlook of Issuer Credit Rating to Stable for Security Life Insurance Company of America

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has revised the outlook to stable from positive and affirmed the issuer credit rating of “bbb” of Security Life Insurance Company of America (Security Life) (Minnetonka, MN). A.M. Best also has affirmed the financial strength rating of B++ (Good) of Security Life. The outlook for the FSR is stable.

“A.M. Best’s Liquidity Model for U.S. Life Insurers.”

The revised outlook reflects the declining trend in Security Life’s operating income over the past few years and the distractions that the company faces near term as its business strategy evolves under its new management team. Additionally, the dental business that Security Life acquired in 2010 within an employee benefits block of business (when it merged with another carrier) continues to require pricing adjustments in order to operate within Security Life’s targeted level of profitability. A.M. Best also notes the dental market continues to be very competitive.

Security Life continues to maintain an appropriate level of capitalization to support its current business strategy and remains focused on the reduction of its expense structure through numerous cost-savings initiatives. The company, under its newly appointed chief executive officer, Mark Zesbaugh, is focused on building its brand, leveraging existing distribution partnerships and creating additional marketing opportunities while providing value-added products to its individual and small group ancillary benefits (life, dental, vision and disability) customers.

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”; “Rating Health Insurance Companies”; and “A.M. Best’s Liquidity Model for U.S. Life Insurers.” 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.