A.M. Best Affirms Financial Strength and Debt Ratings of Ohio National.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) of The Ohio National Life The Ohio National Life Insurance Company, is headquartered in Cincinnati, Ohio. It was originally founded as a stock company in 1909 but converted to mutual company status in 1959. In 1998, Ohio National reorganized as a mutual insurance holding company. Insurance Company (ONLIC ONLIC Ohio National Life Insurance Company (Cincinnati, OH; also seen as ONLI) ) and its wholly-owned subsidiary, Ohio National Life Assurance Corporation (ONLAC). A.M. Best has also assigned an issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "aa-" to ONLIC. These companies are the principal insurance subsidiaries of Ohio National Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , Inc. (ONFS), which is the penultimate holding company in the organization's mutual holding company structure. Concurrently, A.M. Best has affirmed the existing debt ratings of ONFS' outstanding senior notes and the ICR of "a-"and the existing surplus notes of ONLIC. All companies are headquartered in Cincinnati, OH. The outlook for all ratings is stable. These ratings reflect the group's strong organic sales growth, diversified distribution, effective asset/liability management Asset/Liability Management A technique companies employ in coordinating the management of assets and liabilities so that an adequate return may be earned. Also known as "surplus management. , improving operating returns and solid investment performance. Ohio National's increasing market penetration in its core life and annuity business is facilitated by an efficient expense structure supported by advanced technology platforms. These strengths are partially offset by the group's capitalization being somewhat below expectations for its rating category--although NAIC NAIC See National Association of Investors Corporation (NAIC). risk-based capital remains sound--and its above-average exposure to mortgage loans and below investment grade bonds relative to capital. A.M. Best notes ONFS' moderate financial leverage--currently about 25%--and operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. (net premiums to capital), are somewhat offset by solid interest coverage and low exposure to riskier investment classes. Although Ohio National's operating trends--on both GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and statutory bases--continue to show considerable improvement, its returns have historically trailed similarly-rated peers. This action follows the recent announcement that Ohio National's plan to acquire Security Mutual Life Insurance Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (Security Mutual) (Binghamton, NY) via a sponsored demutualization Demutualization The process of changing corporate structure from a mutual fund company to some other form, such as a limited liability or corporation. Notes: This means mutual/life insurance companies convert from policyholder companies to stock companies. has been terminated due to failure to obtain regulatory approval from the New York Insurance Department (NYID). Regulatory approval was declined as a result of the companies' inability to reach a stock purchase agreement that was satisfactory to the NYID. This transaction, if consummated, had been expected to enhance Ohio National's regional presence in the New York market place and provide broader product and distribution capabilities to Security Mutual. A.M. Best has also affirmed the financial strength rating of A+ (Superior) of National Security Life and Annuity Company (NSLAC) (Binghamton, NY), ONLIC and Security Mutual's existing joint venture that markets variable annuities Variable annuities Investment contracts whose issuer pays a periodic amount linked to the investment performance of an underlying portfolio. . The rating outlook is stable. Although the joint venture potentially facilitates development of Ohio National's presence in the New York metropolitan market place, the Security Mutual acquisition would have immediately improved Ohio National's New York geographic footprint, while significantly increasing the scale of its life insurance business. While termination of the agreement is not material to Ohio National's ratings, A.M. Best viewed the proposed acquisition as strategically important to enhancing its geographic profile and providing a better balance between accumulation and protection product earnings. The following debt ratings have been affirmed: Ohio National Financial Services, Inc.-- --"a-" on $200 million 7% senior unsecured notes, due July 2011 --"a-" on $150 million 6.35% senior unsecured notes, due April 2013 Ohio National Life Insurance Company-- --"a" on $50 million 8.5% surplus notes, due May 2026 For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. 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 http://www.ambest.com. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion