OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of AMEX Assurance Company (AMEX Assurance) (Itasca, IL). AMEX Assurance is a wholly owned subsidiary of American Express Company (American Express) [NYSE: AXP]. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect AMEX Assurance’s strong capital position and five-year trend of positive operating income generated by providing insurance products to American Express card members. Offsetting these positive rating factors are the company’s somewhat limited business scope, as a majority of its products are confined primarily to American Express, and lack of growth in surplus levels, as all of the company’s prior year’s net income has been returned to its parent, American Express, through stockholder dividends.
AMEX Assurance’s strong capital position reflects its conservative investment risk profile, generally favorable loss reserve development, trend of profitable operating results driven by solid profit margins, and strong liquidity measures. The favorable operating results reflect the company’s low-cost, direct marketing strategy, and its emphasis on travel-related and other ancillary insurance coverages offered to American Express card members.
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