AM Best Assigns Issue Credit Rating to American Republic Insurance Company’s New Surplus Notes

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Long-Term Issue Credit Rating of “bbb” (Good) to the recently issued $95 million, 8.25% surplus notes, due 2041, of American Republic Insurance Company (Des Moines, IA), the lead insurance subsidiary of Wellabe Inc. (Wellabe). The outlook assigned to the Credit Rating (rating) is stable.

The net proceeds of the surplus notes offering are expected to be utilized for general corporate purposes, including support of new business growth and for capital management. Following the debt issuance, financial leverage is expected to be below 20% at Wellabe.

Wellabe is growing its Medicare Supplemental business strategically, producing good top-line growth. However, operating results have been challenged due to new business strain, which will persist until the new business matures. Capitalization remains strongest, as measured by Best Capital Adequacy Ratio (BCAR). The surplus notes will continue to support risk-adjusted capital until operating results turn favorable.

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