AM Best Revises Outlooks to Positive for Fidelity Life Association, A Legal Reserve Life Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Fidelity Life Association, A Legal Reserve Life Insurance Company (Fidelity Life) (Des Plaines, IL). Fidelity Life is a wholly owned subsidiary of Vericity, Inc. (Vericity), which is ultimately owned by iA Financial Corporation Inc. (iA).

The Credit Ratings (ratings) reflect Fidelity Life’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The rating outlook actions reflect the operational integration and significant capital contributions from the ultimate parent organization following its completed acquisition of Vericity on June 28, 2024. While further integration is expected to continue over the following years, Fidelity Life now operates as a wholly owned subsidiary as part of iA’s strategy to expand its U.S. operations. Capital contributions in late 2024 and in the second quarter of 2025 have allowed the company to recapture previously ceded business and will support future growth as the company attempts to make life insurance more accessible for individuals in the middle market. AM Best expects earnings strain from Fidelity Life’s future growth to be supported by capital contributions from iA as needed.

Fidelity Life’s balance sheet strength assessment is underpinned by its risk-adjusted capitalization, which is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). While Fidelity Life’s surplus level has been improved by executed capital contributions from iA, the company’s operating performance is expected to offset this over the near to intermediate term due to statutory losses driven in part by new business strain as growth continues. The company’s business profile and risk management characteristics are expected to be fully integrated over the next couple of years. Overall, near and intermediate results will be monitored as integration efforts continue.

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