AM Best Withdraws Credit Ratings of William Penn Association

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” of William Penn Association (WPA) (Pittsburgh, PA). The outlook of these Credit Ratings (ratings) remain stable. Concurrently, AM Best has withdrawn these Credit Ratings (ratings) as the company has requested to no longer participate in AM Best’s interactive rating process.

The ratings reflect WPA’s balance sheet strength, which AM Best categorizes as adequate, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management.

WPA maintains a long history in the fraternal marketplace and strong persistency resulting from the loyal nature of its member base, which somewhat mitigates the limited surrender protection on its annuities. WPA has also maintained generally favorable operating return metrics over the previous several years.

Partially offsetting these positive rating factors are WPA’s concentrated exposure to interest-sensitive fixed annuities, high proportion of annuities with high guaranteed rates and the related risk of spread compression in the continuing low interest rate environment, as well as multiple single-issuer investment exposures that represent more than 10% of capital and surplus. Furthermore, WPA has seen a trend of fluctuating premium over the previous several years as new memberships are often eclipsed by reductions of in-force business.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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