A.M. Best Affirms Ratings of Americo Life, Inc. and Assigns Ratings to Its Subsidiaries.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit rating (ICR) of "a-" of Americo Financial Life and Annuity Insurance Company (AFL) (Kansas City, MO). Additionally, A.M. Best has affirmed the FSR of A- (Excellent) and assigned an ICR of "a-" to Great Southern Life Insurance Company (GSL) (Texas), which operates as AFL's New Jersey marketing arm. A.M. Best has also affirmed the FSRs of B+ (Good) and assigned ICRs of "bbb-" to AFL's affiliates, National Farmers Union Life Insurance Company (Texas) and The Ohio State Life Insurance Company (Texas). The outlook for these ratings is stable. Concurrently, A.M. Best has affirmed the ICR of "bbb-" and the debt rating of "bbb-" on $125 million 7.875% senior unsecured notes, due 2013 of Americo Life, Incorporated (Americo) (Kansas City, MO). The outlook for all ratings is stable.

The ratings reflect Americo's improved statutory and GAAP profitability, favorable marketing position through its enhanced distribution, measured annuity premium and its adequate financial leverage and coverage. The ratings also recognize AFL's documented risk management practices and adequate statutory capital position.

Partially offsetting these positive rating factors are the highly competitive conditions in AFL's core individual life and annuity lines, its exposure to equity market and interest rate risk from its interest-sensitive life and annuity liabilities and its decline in direct premiums written. In addition, the ratings consider the increasing contribution of its life products in terms of both premium and reserves and its exposure to the debt service of Americo.

The majority of Americo's earnings have historically been generated from its acquired blocks of mature individual life insurance, which have experienced favorable mortality. Moreover, the company has been able to improve its capital position, create expense efficiencies and bolster its independent marketing organization's distribution relationships in recent years. Furthermore, Americo has effectively implemented strategies within the organization to reduce its financial leverage and improve coverage in recent years; however; 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 relative to equity.

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Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.