AM Best Assigns Credit Ratings to Pillar Life Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of B+ (Good) and a Long-Term Issuer Credit Rating of “bbb-” (Good) to Pillar Life Insurance Company (Pillar) (Harrisburg, PA). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Pillar’s balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).

As a new company formation, AM Best requires a level of conservatism to be built into initial capital levels, and the strong balance sheet strength assessment is based on the expectation that Pillar’s current risk-adjusted capital level will decline in the near-term as the company starts to write business. Rating factors impacting the company are a limited product offering within a highly competitive product space, limited capital resources to draw from, and initial operating loses, which should reverse over time.

Pillar plans to operate with a true direct-to-consumer (DTC) business model, with no intentions to use traditional distribution channels for its products. AM Best views the true DTC business model as higher risk, as this model is untested and many organizations use DTC for certain products along with traditional distribution channels. Pillar’s business strategy is subject to execution risk, and it will need to continue to enhance its ERM risk measurement and modeling capabilities as its balance sheet and liability profile diversify in upcoming years.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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