A.M. Best Revises Issuer Credit Rating Outlook to Negative for Standard Life & Casualty Insurance Company

OLDWICK, N.J.--()--A.M. Best has revised the issuer credit rating (ICR) outlook to negative from stable and affirmed the financial strength rating (FSR) of B (Fair) and the ICR of “bb+” of Standard Life & Casualty Insurance Company (Standard Life) (Salt Lake City, UT). The outlook for the FSR remains stable.

The revised outlook reflects Standard Life’s increased exposure to investment risk. The fixed income investment portfolio has exposure to the oil and gas industry, and there is an elevated risk of asset impairments over the near to medium term due to the decline of the price of oil. A.M. Best is concerned that an asset impairment could result in a decline in risk-adjusted capitalization.

An offsetting rating factor is Standard Life’s improved premium trend and a strong distribution network. The trend of declining premium income was reversed in 2014 as a result of the growth of life insurance and the short-term health insurance product, however, the demand for short-term health has declined in 2015. A.M. Best expects the premium growth trend from the company’s life products to continue through the near to medium term. Additionally, Standard Life has a well-established distribution network that includes solid relationships with Independent Marketing Organizations and brokers, which contract with captive and semi-captive agents.

A positive change in ratings could occur if Standard Life experiences a substantial level of premium and earnings growth. A negative rating action could occur if Standard Life incurs a material depletion in its risk-adjusted capital and surplus, the company’s revenue and earnings continue to trend negatively over the near term or financial leverage increases above the A.M. Best guidelines.

This press release relates to rating(s) 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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

A.M. Best Company
Craig Draghi, (908) 439-2200, ext. 5164
Financial Analyst
craig.draghi@ambest.com
or
Wayne Kaminski, (908) 439-2200, ext. 5061
Senior Financial Analyst
wayne.kaminski@ambest.com
or
Christopher Sharkey, (908) 439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, (908) 439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best Company
Craig Draghi, (908) 439-2200, ext. 5164
Financial Analyst
craig.draghi@ambest.com
or
Wayne Kaminski, (908) 439-2200, ext. 5061
Senior Financial Analyst
wayne.kaminski@ambest.com
or
Christopher Sharkey, (908) 439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, (908) 439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com