April 04, 2013 10:28 AM Eastern Daylight Time
A.M. Best Affirms Ratings of Thrivent Financial for Lutherans and Its
Subsidiary
OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has affirmed the financial strength rating of A++
(Superior) and issuer credit ratings of “aa+” of Thrivent Financial
for Lutherans (Appleton, WI) and its subsidiary, Thrivent Life
Insurance Company (Minneapolis, MN) (together known as Thrivent
Financial). The outlook for all ratings is stable.
The ratings reflect Thrivent Financial’s strong risk-adjusted
capitalization, its favorable and increasing operating earnings trend,
its leading market presence within the Lutheran community and rising
assets under management. While Thrivent Financial maintains exposure to
equity market risk in its separate account portfolio, the society’s
exposure to living benefit guarantees within its variable product
portfolio is viewed as modest. A.M. Best notes that Thrivent Financial
continues to demonstrate strong affinity and name recognition within its
large Lutheran policyholder base by providing diversified financial
services products and fraternal benefits programs. A.M. Best believes
that Thrivent Financial’s overall sound liquidity profile and its
ability to meet policyholder obligations remains very strong,
considering its fraternal niche and stable liability profile.
Partially offsetting these positive rating factors are A.M. Best’s
concerns regarding Thrivent Financial’s challenges, which are associated
with growing its membership base and its level of high risk asset
classes relative to capital. These comprised Thrivent Financial’s
non-government agency mortgage-backed securities, private equity and
limited partnership holdings as well as a large commercial mortgage loan
portfolio. Moreover, Thrivent Financial has reentered the long-term care
marketplace, a line of business that A.M. Best views as less credit
worthy than the traditional life and annuity product businesses.
Thrivent Financial has experienced spread compression due to the
continuing low interest rate environment and especially in interest
sensitive products with higher guaranteed minimum crediting rates.
A.M. Best believes that Thrivent Financial is well positioned at its
current rating level. Key rating drivers that may lead to negative
rating actions include sustained deterioration in Thrivent Financial’s
operating performance, capital erosion due to investment losses and/or
heightened risk appetite.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Key criteria utilized include: “Rating
Members of Insurance Groups” and “Understanding BCAR for Life/Health
Insurers.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world’s oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS
RESERVED.
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