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the best The outlook has been revised from negative to stable, and the financial strength rating of B++ (good) and the long-term issuer credit rating of American Fidelity Life Insurance Company (AMFI) (Pensacola, Florida) of “bbb” (good) have been confirmed ).
The credit rating reflects AMFI’s balance sheet strength (AM Best considers it very strong), its marginal operating performance, limited business conditions and proper enterprise risk management (ERM).
The adjusted stable outlook represents AMFI’s improvement in corporate risk management and the relatively stable operating performance trend.
Measured by Best Capital Adequacy Ratio (BCAR), AMFI’s risk-adjusted capital value is considered the strongest. However, AM Best pointed out that moderate capital growth and some downward credit migration have affected the risk-based capital ratio. Strong liquidity and high overall liquidity indicators. AMFI’s bond investment portfolio is made up of almost all companies and has very good liquidity. In addition, the investment portfolio has a stepped maturity date, which can provide sufficient liquidity to meet unexpected cash demands. The premium trend has been declining throughout history, but the trend has reversed in 2020. Income is generally positive and stable, and there has been no operating loss in the past few years. In addition, despite the lower interest rates, the premium spreads of interest-sensitive products will increase moderately in 2020. AMFI tends to provide active-duty soldier products to accumulate savings and cash value for future use.
Some of the mitigating factors include the concentration of certain sectors in AMFI’s bond portfolio, the trend of NAIC-2 bond distributions increasing to more than two-thirds, and the concentration of mortgage loans in Pensacola, Florida. The statutory rate of return is low compared to the average level of the industry and the life insurance industry.
This press release is related to the credit rating published on the AM Best website.For all rating information related to the issuance and related disclosures, including details of the office responsible for issuing each rating referenced in this issue, please refer to AM Best’s Recent rating activity Web page.For additional information on the use and restrictions of credit rating opinions, please see The best credit rating guide.For information on the proper use of Best’s credit ratings and AM Best press releases, please review Media Guide-Use Best Credit Rating and AM Best Rating Action Press Release Correctly.
AM Best is a global credit rating agency, news publisher and data analysis provider specializing in the insurance industry. The company is headquartered in the United States, has operations in more than 100 countries, and has regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.For more information, please visit www.ambest.com.
Copyright © 2021 AM Best Rating Services, Inc. and/or its affiliates. all rights reserved.
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