OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bb+” of American Health and Life Insurance Company (AHLIC). Additionally, A.M. Best has affirmed the FSR of B (Fair) and the Long-Term ICR of “bb+” of Triton Insurance Company (Triton). Both companies are domiciled in Fort Worth, TX. Concurrently, A.M. Best has affirmed the FSRs of B (Fair) and Long-Term ICRs of “bb+” of Merit Life Insurance Co. (Merit Life) and Yosemite Insurance Company (Yosemite). Both entities are domiciled in Evansville, IN. The outlook of these Credit Ratings (ratings) is stable. All entities are wholly owned by OneMain Holdings, Inc. (OneMain) (NYSE:OMF), formerly Springleaf Holdings, Inc.
The rating and outlook affirmations of AHLIC and Merit Life reflect the risk profile of their parent, OneMain, a below investment grade, consumer finance company whose operating flexibility and business profile had been challenged by the credit crisis and the subsequent difficult macroeconomic environment. A.M. Best notes that OneMain continues to make progress in repaying near-term debt and improving its liquidity, as well as improving operating performance. AHLIC maintains a favorable market position in the credit insurance market, and the company historically has reported favorable operating income, contributing to solid risk-adjusted capitalization. However, top-line growth has been challenged more recently, as closed block runoff is outpacing premium growth. Merit Life continues to report volatility within its credit life operations and a modestly declining premiums trend. A.M. Best believes the organization as a whole will work to consolidate entities, and improve efficiencies and scale within its insurance operations near term.
The ratings and outlooks of Triton and Yosemite reflect their historically strong underwriting and operating profitability, superior risk-adjusted capitalization, management’s expertise in consumer finance-oriented products and the business opportunities derived from its affiliates. Partially offsetting these positive rating factors are the dependence on OneMain as the companies’ primary distribution source, and in the case of Triton, the underwriting sensitivity of its involuntary unemployment insurance business regarding initial unemployment claims filed in the United States and Canada. In addition, the companies’ future financial constraints also were considered in terms of underwriting performance trends and dividends, as these may stress risk-adjusted capital levels needed to support future growth.
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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