A.M. Best Assigns Group Rating to Western & Southern Financial Group's Subsidiaries; Affirms Debt Ratings and Assigns Issuer Credit Rating to WSLIC.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A++ (Superior) of Western & Southern Financial Group, Inc.'s (WSFG) core life insurance subsidiaries, and assigned the group rating to its other subsidiaries. Group members include Western and Southern Life Insurance Company (WSLIC), Western-Southern Life Assurance Company, Columbus Life Insurance Company, Integrity Life Insurance Company and National Integrity Life Insurance Company (New York). A.M. Best notes the increasing contribution of the group members to the success of the enterprise as well as the guarantees in place with WSLIC. All companies are domiciled in Ohio, except where specified.

Concurrently, A.M. Best has assigned an issuer credit rating (ICR) of "aa+" to WSLIC, an ICR of "aa-" to WSFG and affirmed WSFG's senior debt rating of "aa-" on $500 million 5.75% 30-year senior unsecured notes, due 2033. The outlook for all ratings is stable.

The ratings reflect the group's superior risk-adjusted capitalization, conservative operating profile, diverse product and distribution platforms and consistent earnings performance.

The rating also recognizes the strong regional presence the company has built, particularly in the upper Midwest, and the excellent overall quality and performance of WSFG's investment portfolio. Given its low financial leverage, the group's stable earnings provide strong debt service capacity to support fixed charges.

Through its historical focus on life insurance, underlying operating fundamentals and expense management initiatives, the group has generated solid earnings and a very strong capital base, along with the flexibility to pursue growth opportunities in the insurance and financial services market. With its established career agency force, WSFG complements its core life insurance business through its asset-management and retirement-savings subsidiaries, which leverage its investment management capabilities and provide fee income to the group.

Offsetting factors include the intensely competitive nature of the insurance and financial services markets, which include distribution challenges, as well as the group's geographic concentration in the Midwest, which have contributed to the below average growth of its core traditional life products relative to the industry as a whole. In addition, retirement savings products have been the lead contributor to the group's growth; however, this product line presents earnings challenges in the current economic environment. Going forward, the group may be challenged to grow earnings at levels commensurate with its peers.

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