Fitch Affirms Rating on AmerUs Group.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms the 'BBB' long term issuer rating of AmerUs Group Co. (AmerUs) as well as the ratings on its outstanding debt (see below for a complete listing). In addition, Fitch affirmed the 'A' insurer financial strength ratings to the following AmerUs insurance subsidiaries: AmerUs Life Insurance Co. (AmerUs Life), Indianapolis Life Insurance Co., American Investors Life Insurance Co., and Bankers Life Insurance Co. 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 . The Rating Outlook is Stable. Ratings of AmerUs are supported by good profitability, diverse product offerings with niche positions in indexed life and indexed annuities and good distribution capabilities through a variety of sources. Fitch believes that AmerUs exhibits product design and product hedging capabilities, exemplified in its indexed annuity and life products. Additional strengths include a highly liquid investment portfolio and strong statutory capitalization at the insurance operating subsidiaries, as measured by a consolidated NAIC NAIC See National Association of Investors Corporation (NAIC). risk-based capital ratio Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. of 342% of the company action level at June 30, 2005. Ratings concerns include exposure to below investment grade bonds and high operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. , which are both larger than similarly-rated peer companies. Further, Fitch believes that as an issuer of indexed products, which are nonregistered with the Securities and Exchange Commission, AmerUs faces potential industry-wide regulatory and market conduct issues regarding distribution, product disclosures, and customer suitability. AmerUs is in the process of settling its California lawsuits, covering all California policyholders, related to one particular wholly-owned marketing organization selling traditional fixed annuities Fixed annuities Contracts in which an insurance company or issuing financial institution pays a fixed dollar amount of money per period. . During the third quarter, AmerUs took a $6.4 million after tax charge and believes this amount to be appropriate to cover all costs for California policyholders. The management team at AmerUs has spent 2005 working on simplifying the capital structure of the company by redeeming hybrid securities. Specifically, proceeds from issuances of senior notes and perpetual preferred securities were used to repay optionally convertible equity-linked accreting notes and bank debt. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma , equity-adjusted, June 30, 2005 debt-to-total capital was less than 17%, comparing favorably to similarly rated companies. Factors that would negatively impact ratings in the AmerUs Group include losses related to significant litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or damage to AmerUs's competitive position as measured by declining sales or significant surrender activity. AmerUs's fixed-charge coverage was 7.5 times (x) in 2004, eliminating realized/unrealized investment gains from the earnings figure. This level of fixed-charge coverage is considered solid and remains an important component in AmerUs's debt ratings. Fitch expects AmerUs to meet management's guidance for profitability as measured by GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ROE of 12%, for leverage as measured by adjusted debt-to-total capital below 25%, and for capitalization as measured by NAIC risk-based capital in excess of 300% of the company action level. AmerUs, an insurance holding company, is headquartered in Des Moines, Iowa “Des Moines” redirects here. For other uses, see Des Moines (disambiguation). Des Moines (pronounced /dɪˈmɔɪn/ in English, , and reported total assets of $24 billion and stockholders' equity of $1.7 billion at June 30, 2005. The following issues are affirmed with a Stable Outlook by Fitch: AmerUs Group Co. -- Perpetual preferred stock at 'BB+'; -- Long-term issuer at 'BBB'; -- Senior notes at 'BBB'; -- PRIDES at 'BBB'. AmerUs Capital I -- Trust preferred at 'BB+'. AmerUs Life Insurance Co. -- Insurer financial strength (IFS) at 'A'. Indianapolis Life Ins. Co -- Surplus notes at 'BBB+'; -- IFS at 'A'. American Investors Life Insurance Co. -- IFS at 'A' Bankers Life Insurance Co. of New York -- IFS at 'A'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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