OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” from “a-” of American Public Life Insurance Company (American Public). Concurrently, A.M. Best has affirmed the FSR of A+ (Superior) and the (Long-Term ICR) of “aa-” of American Fidelity Assurance Company (American Fidelity). Both companies are subsidiaries of American Fidelity Corporation (AFC). All companies are domiciled in Oklahoma City, OK. The outlook of these Credit Ratings (ratings) is stable.
American Public’s rating upgrades recognize the continued premium and earnings growth over the past five years. Through the combination of sales force expansion and the introduction of new or revised products, the company has reported notable annual premium growth. The new sales, favorable claims experience and higher levels of net investment income have resulted in earnings growth. In addition, the net income has contributed to capital growth, which has been offset partially by dividend payments to the parent company. Furthermore, American Public is the worksite brokerage focused operation with a worksite product portfolio. American Public’s parent company, AFC, and its lead operating entity, American Fidelity, provide operational and financial support to American Public.
The rating affirmations of American Fidelity reflect its trend of favorable operating results and solid risk-adjusted capital position. Additionally, the company has maintained steady capital growth despite sizable dividend payments to its parent company over the past several years. The rating affirmations also reflect the company’s well-established niche in the voluntary education market.
A.M. Best remains concerned with American Public and American Fidelity’s sizeable exposure to real estate-related investments. However, American Fidelity’s commercial mortgage loan portfolio has continued to perform well through a weak U.S. economy. Additionally, each company operates in competitive markets with sales concentrated in a limited area.
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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