A.M. Best Raises American Skandia Life Assurance 'A-' -Excellent' Rating to 'A' -Excellent-.OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 21, 1999--A.M. Best Co. today raised the rating of American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Skandia Life Assurance Corp. to "A" (Excellent) from "A-" (Excellent). The action reflects the strong national presence the company has built in the variable-annuity market, its consistently improving GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). earnings results and the financial and operational support the company receives from its ultimate parent, Skandia Insurance Co., Ltd. The company's approach toward differentiation differentiation, in biology, series of changes that occur in cells and tissues during development, resulting in their specialization. This, in turn, permits a greater variety of organisms. in the highly competitive variable-annuity market, combined with the technological support provided to its producers, has enabled the company to build a strong and diverse distribution network. Its expertise in evaluating asset manager performance, and innovative product designs incorporating performance-oriented funds has led American Skandia Life to become one of the fastest-growing variable-annuity writers in the nation with annual sales growth of 39% over the past five years. These efforts have led American Skandia Life to become the sixth-largest variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. writer in terms of new sales. While the company's operating performance and market profile have improved dramatically over the past few years, its rapid growth and expansion in the variable annuity marketplace has strained capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. . A.M. Best notes that the parent company is committed to supporting the capital needs of American Skandia Life through its growth period. While Best notes the innovative approach to financing used by American Skandia Life, including the bulk securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. of future mortality and expense fees, the company will continue to require external financing In the theory of capital structure, External financing is the phrase used to describe funds that firms obtain from outside of the firm. It is contrasted to internal financing which consists mainly of profits retained by the firm for investment. to support its operations over the near term. A.M. Best expects the company's capitalization will remain challenged in the near term, however, the use of alternative funding sources will diminish over time as profits from its in-force business should enable the company to internally fund growth. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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