OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” from “bbb+” of Illinois Mutual Life Insurance Company (Illinois Mutual) (Peoria, IL). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The rating upgrades reflect improvement in top-line growth, especially in the core ordinary life segment, and maintenance of its absolute capital and strong risk-adjusted capitalization. The uptick in premiums, while modest, is a result of the progress Illinois Mutual has made to strengthen its operations and distribution strategy, and the execution of its strategic initiatives.
The ratings continue to reflect Illinois Mutual’s diverse business profile that focuses on traditional ordinary life insurance and individual disability income products for the middle income market, its solid overall net operating performance derived primarily from its core disability income segment that has experienced favorable morbidity, and its increasing surplus and strong risk-adjusted capitalization. The ratings also reflect the diversification and improved risk profile of Illinois Mutual’s investment portfolio.
An offset to these positive rating factors is the ongoing headwind to sustaining top-line growth, given the inherent challenges in cost-effectively penetrating the middle market with individual life and disability product offerings. Additionally, A.M. Best notes that the company is likely to experience further earnings compression due to the ongoing low interest rate environment together with its anticipated investments in infrastructure and strategic initiatives.
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.
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