A.M. Best Co. Affirms Ratings of StanCorp Financial Group Inc.OLDWICK, N.J. -- 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 the Standard Insurance Company (Standard Insurance) (Portland, OR) and The Standard 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 (White Plains, NY), both wholly-owned subsidiaries of StanCorp Financial Group Inc. (StanCorp) (NYSE NYSE See: New York Stock Exchange : SFG SFG StanCorp Financial Group SFG San Francisco Giants (baseball team) SFG Special Forces Group SFG Sum Frequency Generation SFG Square Foot Gardening SFG Symmetrical Field Geometry (JBL speaker technology) ) (Portland, OR). Concurrently, A.M. Best has affirmed the debt rating of "bbb+" 6.875% on the existing unsecured senior notes of StanCorp. The outlook on all ratings is stable. The rating affirmations reflect Standard Insurance's established position in the employee benefits market, record earnings levels reported in 2003, its sound risk-adjusted capitalization at the operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. and its conservative level of financial leverage. The ratings also recognize Standard Insurance's disciplined pricing approach, which has contributed to its favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. operating results. While Standard Insurance also has some diversification through its Individual and Retirement Plans divisions, operating results remain primarily tied to the performance of its employee benefits segment. Favorable cash flow at StanCorp's principal insurance company, Standard Insurance, continues to allow an elevated level of dividends, which provides ample support for the debt service. It is anticipated that continuation of favorable earnings will contribute to debt servicing requirements. A.M. Best anticipates financial leverage and debt service coverage to remain under 25% and at least 7 times, respectively. These strengths are partially offset by the general vulnerability of virtually all of Standard Insurance's business lines to economic conditions and its large exposure to investments in commercial mortgages. It should be noted that Standard Insurance participates in smaller sized loans, which most lenders are not as attracted to, and the company's mortgage portfolio has historically outperformed industry averages. The low interest rate environment, combined with the difficult employee benefits market, has contributed to reduce the growth of its business over the past few years. Given the recent rise in interest rates, A.M. Best expects that Standard Insurance should begin to report improving new sales trends. The following debt ratings have been affirmed with a stable outlook: StanCorp Financial Group Inc.-- --"bbb+" on $250 million 6.875% unsecured senior notes, due 2012 The following indicative debt ratings have been affirmed with a stable outlook under the shelf registration: StanCorp Financial Group Inc.-- --"bbb+" on unsecured senior debt --"bbb" on subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". For current Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , independent data and analysis on more than 1,050 health companies and more than 130 HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, industry composites, please visit http://www.ambest.com/health/. For a list of A.M. Best's debt ratings, please visit http://www.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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