OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “bbb” and affirmed the Financial Strength Rating of B++ (Good) of American Life & Security Corp. (American Life) (headquartered in Lincoln, NE). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect American Life’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The Long-Term ICR upgrade reflects American Life’s execution of its business plan in achieving various targets, which included repositioning the company to address a market need for an administrative and operationally focused carrier. This fee-based model has focused on providing services to third-party reinsurers - across the entire life cycle of a policy – for risk origination, policy administration, and asset liability management, in addition to the potential for future third-party administration and asset management opportunities.
These efforts included developing a policy administration platform, launching new products and building new distribution relationships. As a result, American Life launched two new multi-year guaranteed annuity products and three fixed indexed annuity products with the ability to scale significantly as a technology–enabled life and annuity carrier. The company has outperformed its initial financial targets over the past two years.
Furthermore, the company has obtained additional dedicated reinsurance partners as planned. The ratings reflect AM Best’s view that the group will continue to make additional progress with its strategic business plan.
American Life’s risk-adjusted capitalization, as measured by the Best’s Capital Adequacy Ratio (BCAR), is expected to remain at the strongest level over the near term, driven by additional funding raised by Midwest Holding Inc, and partially through continued outside funding. The balance sheet strength assessment of strong also takes into account their conservative investment strategy and the high use of reinsurance agreements.
AM Best considers American Life’s overall operating performance to be adequate, as results are tracking above plan, but early trends are still considered fairly modest. Premium has increased and AM Best will monitor this against future growth projections. American Life also plans to launch additional new products by leveraging key technology solutions, which will help support growth targets.
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