A.M. Best Revises Outlook to Negative for Thrivent Financial for Lutherans and Its Subsidiary.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A++ (Superior) and issuer credit ratings (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+" of Thrivent Financial for Lutherans Thrivent Financial for Lutherans (first word pronounced "THRIVE-int" — or more precisely, alluding to contractions, "thrive—n't"; IPA pronunciation: /ˈθɹaɪvɘnt/ and Thrivent Life Insurance Company (Thrivent Financial) (Minneapolis, MN). The outlook for these ratings has been revised to negative from stable. The ratings reflect Thrivent Financial's strong market presence within the Lutheran community, more than adequate level of risk-adjusted capitalization, positive operating results and scale in its core lines of business and overall good asset liability management. While Thrivent Financial is exposed to equity market risk in its separate account products, the society's exposure to more aggressive living benefits within its variable product portfolio is modest. A.M. Best notes that Thrivent Financial continues to demonstrate strong affinity and name recognition within its large Lutheran base by providing diversified financial The diversified financial services segment includes a range of consumer and commercially-oriented companies offering a wide variety of products and services, including various lending products (such as home equity loans and credit cards), insurance, and securities and investment services products and fraternal fraternal /fra·ter·nal/ (frah-ter´n'l) 1. of or pertaining to brothers. 2. of twins; derived from two oocytes. fra·ter·nal adj. 1. Of or relating to brothers. benefits programs. A.M. Best believes that Thrivent Financial's overall liquidity profile and its ability to meet policyholder obligations remains strong when considering its fraternal niche and liability profile. The negative outlook reflects the unfavorable impact of the weak credit and equity markets on Thrivent Financial's financial flexibility, as reflected in a sizable decline in its unassigned funds and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). equity. The society's investment portfolio has recorded large unrealized and realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. in its fixed income, equity and alternative asset classes. Nevertheless, A.M. Best notes that its risk-adjusted capitalization remains strong. A.M. Best expects lower operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before in the company's core lines of business as a result of reduced fee income from its equity-linked products, lower earnings from alternative asset classes and investment losses. The revised outlook further reflects A.M. Best's concern over the potential for additional investment losses that could negatively impact Thrivent Financial's balance sheet strength and its operating results in 2009, noting the continuing financial volatility and other emerging risks in the U.S. economy. For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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