A.M. Best Affirms Financial Strength and Debt Ratings of Americo Life, Inc.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 5, 2004 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A- (Excellent) of Americo Financial Life and Annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. Insurance Company (AFL AFL: see American Federation of Labor and Congress of Industrial Organizations. ) (Kansas City Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , MO) and the "bbb-" debt rating on Americo Life, Inc.'s (Americo) (Kansas City, MO) senior notes. The financial strength ratings of Americo's other insurance affiliates have also been affirmed. The rating outlook is stable for all ratings. The ratings reflect Americo's improving GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). profitability, expanded distribution capacity and considerable growth in annuity premium. The ratings also recognize its solid investment portfolio and adequate statutory capital position. Partially offsetting these factors are the highly competitive conditions in AFL's core individual life and annuity lines, combined with compressed profit margins due to its exposure to interest rate risk from its interest sensitive life and annuity liabilities and, to a lesser extent, its securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. investments. In addition, the rating considers the statutory strain generated by AFL's growing operations and its exposure to the debt service of its parent, Americo. The majority of Americo's earnings are generated from its acquired blocks of mature individual life insurance, which have experienced favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. mortality. Increased life and annuity sales reflect the organization's focus on the senior, mortgage and wealth-accumulation markets, evidenced by the successful recruiting of new independent marketing organizations. While the organization has reduced its debt levels and improved coverage in recent years, A.M. Best notes that the value of business acquired--established as a result of acquisitions--combined with deferred acquisition costs, creates a moderately high level of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. relative to equity. The financial strength ratings for the following Americo Life, Inc. subsidiaries have also been affirmed:
-- Great Southern Life Insurance Company A- (Excellent)
-- The Ohio State Life Insurance Company A- (Excellent)
-- National Farmers Union Life Insurance Company B+ (Very Good)
The following debt rating has been affirmed: Americo Life, Inc. -- -- "bbb-" on $125 million 7.875% senior notes, due 2013 For a list of A.M. Best's debt ratings, please visit http://www3.ambest.com/debtratings/. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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