OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa-” of Central States Indemnity Co. of Omaha (CSI) (Omaha, NE). In addition, A.M. Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa-” of CSI Life Insurance Company (CSI Life) (Omaha, NE). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect CSI’s excellent risk-adjusted capitalization, consistently profitable performance, strong balance sheet liquidity and very conservative underwriting leverage, as well as the benefits made available through its ultimate parent, Berkshire Hathaway, Inc. (Berkshire) [NYSE: BRK A and BRK B]. CSI is a specialty insurance company that provides Medicare Supplement insurance as its primary product line.
These positive rating factors are offset by CSI’s elevated investment leverage, new business strain and near-term execution risk. CSI currently writes more non-credit insurance premiums compared with its long-standing credit insurance business.
The rating affirmations of CSI Life reflect its synergies with CSI, as the company commenced writing direct sales of Medicare Supplement insurance in 2014. The ratings also reflect the strong risk-adjusted capitalization and the explicit support provided by its parent, CSI, as well as the benefits made available through its ultimate parent, Berkshire. Offsetting rating factors include CSI Life’s limited business profile, lack of product diversification and the competitive Medicare Supplement marketplace.
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