OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bb+” of American Health and Life Insurance Company (AHLIC). Additionally, A.M. Best has affirmed the FSR of B (Fair) and the Long-Term ICR of “bb+” of Triton Insurance Company (Triton). Both companies are domiciled in Fort Worth, TX. Concurrently, A.M. Best has affirmed the FSRs of B (Fair) and the Long-Term ICRs of “bb+” of Merit Life Insurance Co. (Merit Life) and Yosemite Insurance Company (Yosemite). Both entities are domiciled in Evansville, IN. The outlook of these Credit Ratings (ratings) is stable. All entities are wholly owned by OneMain Holdings, Inc. (OneMain) (NYSE:OMF), formerly Springleaf Holdings, Inc.
The ratings of AHLIC and Merit Life reflect each company’s balance sheet strength, which A.M. Best categorizes as strong, as well as their adequate operating performance, business profile and enterprise risk management (ERM). A.M. Best notes that Merit Life’s business profile is considered limited due to the run-off nature of its operations. Additionally, the ratings of AHLIC and Merit Life reflect the risk profile of their parent, OneMain, a below investment grade, consumer finance company. A.M. Best notes that OneMain has made some progress in repaying near-term debt and improving its liquidity, as well as improving operating performance, but leverage remains high and coverage metrics are modest. AHLIC maintains a favorable market position in the credit insurance market, and the company historically has reported favorable operating income, contributing to solid risk-adjusted capitalization. However, top-line growth has been challenged more recently, as closed block runoff is outpacing premium growth. Merit Life continues to report volatility within its credit life operations and a modestly declining premiums trend. A.M. Best believes the organization as a whole will work to consolidate entities, and improve efficiencies and scale within its insurance operations in the near term.
The ratings of Triton and Yosemite reflect each company’s balance sheet strength, which A.M. Best categorizes as very strong, as well as their strong operating performance, neutral business profile and appropriate ERM. The ratings also reflect management’s expertise in consumer finance-oriented products and the business opportunities derived from its affiliates. Triton and Yosemite are dependent on OneMain as their primary distribution source and have significant concentration in credit insurance products. Triton maintains a competitive market position in the credit insurance market and has historically reported strong operating results. However, recent trends show a decline in premiums, and expense trends have been on the rise. Yosemite also has reported a recent decline in premiums and some operating volatility related to its closed block runoff business; however, overall operating performance continues to be strong. In addition, the companies’ future financial constraints were considered in terms of underwriting performance trends and dividends, as these constraints may stress risk-adjusted capital levels needed to support future growth.
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