Fitch Lwrs Rtgs of Western & Southern as Part of Industry Review.Business Editors CHICAGO--(BUSINESS WIRE)--Sept. 19, 2002 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. has lowered the ratings of Western and Southern as part of a comprehensive industry review of all North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. life insurance company ratings that was initiated on August 14, 2002, and completed today. The insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. financial strength ratings were lowered to 'AA+' for The Western and Southern Life Insurance Company (WSLIC WSLIC Western and Southern Life Insurance Company ) and its wholly owned life insurance subsidiaries, Western-Southern Life Assurance Company (WSLAC), Columbus Life Insurance Company (Columbus), Integrity Life Insurance Company (Integrity) and National Integrity Life Insurance Company (National Integrity). Western and Southern represents one of 35 life insurance groups, making up approximately 42% of Fitch's ratings universe, that had ratings lowered as a result of the review. Western and Southern's Rating Outlook is Stable. The industry review was the result of Fitch's belief that recent adverse performance within the investment markets required an accelerated recognition of certain industry trends that have been negatively impacting life insurers for some time. These trends, specifically unfavorable competitive pressures and product portfolio migration, have been inherent in Fitch's long-standing Negative Rating Outlook on the industry and, as a result of the review, have been fully considered into ratings generally. The review led to the establishment of higher standards for each rating category in many quantitative and qualitative areas of analysis. Rating changes at the company level involved a reassessment Reassessment The process of re-determining the value of property or land for tax purposes. Notes: Property is usually reassessed on an annual basis. You may request a "reassessment" if you disagree with your assessment. of each insurer's fundamental characteristics relative to Fitch's new ratings standards. This included a review of the company's product risk profile and fundamental competitive and operating characteristics, and a review of the company's capital position (risk-based capital ratios Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. , financial leverage and capital size), among numerous other factors. Fitch fitch: see polecat. also looked closely at recent and anticipated investment performance under current adverse capital markets conditions. For Western and Southern, the rating action was driven primarily by enhancements in Fitch's methodology, which tightened the qualitative fundamental characteristics of the 'AAA' rating category to include clear leadership positions in major markets and a large stable block of traditional life insurance reserves in excess of $25 billion. Fitch's new rating methodology also reflects a somewhat lower benefit for Western and Southern's very strong 'excess' capital position. The rating action was driven by Fitch's revised criteria versus any fundamental change in financial results or standing at Western and Southern. Fitch's recent affirmation A solemn and formal declaration of the truth of a statement, such as an Affidavit or the actual or prospective testimony of a witness or a party that takes the place of an oath. An affirmation is also used when a person cannot take an oath because of religious convictions. of Western and Southern's rating on June 24 did not contemplate that we would be launching our comprehensive review on August 14. Thus, users of the rating should in no way infer that there was any adverse change in Western and Southern's core solvency The ability of an individual to pay his or her debts as they mature in the normal and ordinary course of business, or the financial condition of owning property of sufficient value to discharge all of one's debts. solvency n. characteristics between the affirmation and today's rating action. Today's action was driven by industry and methodology changes made by Fitch subsequent to June 24. The ratings also continue to reflect the organization's strong capital position, the organization's adjusted profitability that is in line with strong life insurance companies, and excellent sales growth in annuities through the bank and broker-dealer Broker-Dealer A person or firm in the business of buying and selling securities operating as both a broker and dealer depending on the transaction. Notes: Technically, a broker is only an agent who executes orders on behalf of clients, whereas a dealer acts as a principal distribution channels. Asset quality and liquidity are good, as the investment portfolio has a large concentration of publicly traded investment-grade bonds Investment-grade bonds A bond that is assigned a rating in the top four categories by commercial credit rating companies. S&P classifies investment-grade bonds as BBB or higher, and Moody's classifies investment grade bonds as BAA or higher. Related: High-yield bond. . Additionally, although Western and Southern has one of the highest percentages of equities in the industry, Fitch considers the overall quality of the investment portfolio to be good as the organization invests assets supporting liabilities in fixed income securities and invests surplus in equities to improve long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. total return. Entity/Issue/Type/Action/Rating/Outlook Western and Southern Life Insurance -- Insurer financial strength Lowered to 'AA+' from 'AAA' /Stable. Western-Southern Life Assurance Company -- Insurer financial strength Lowered to 'AA+' from 'AAA' /Stable. Columbus Life Insurance Company -- Insurer financial strength Lowered to 'AA+' from 'AAA' /Stable. Integrity Life Insurance Company -- Insurer financial strength Lowered to 'AA+' from 'AAA' /Stable. National Integrity Life Insurance Company -- Insurer financial strength Lowered to 'AA+' from 'AAA' /Stable. |
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