Fitch Ratings Affirms Navy Mutual Aid Association At 'A+'.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. has affirmed Navy Mutual Aid Association's (NMAA NMAA National Museum of American Art NMAA New Mexico Activities Association NMAA Nursing Mothers Association of Australia NMAA National Museum of African Art NMAA National Multimedia Association of America NMAA Navy Mutual Aid Association NMAA Night Master-At-Arms ) 'A+' insurer financial strength rating. The Rating Outlook is Stable. NMAA's strong 'A+' insurer financial strength rating is based on its sound capital, solid niche position as a provider of mainly interest-sensitive and term life insurance to active, reserve and retired members of the U.S. Navy, U.S. Marine Corps, U.S. Coast Guard, U.S. Public Health Service (USPHS USPHS United States Public Health Service. USPHS abbr. United States Public Health Service ), National Oceanic and Atmospheric Administration Noun 1. National Oceanic and Atmospheric Administration - an agency in the Department of Commerce that maps the oceans and conserves their living resources; predicts changes to the earth's environment; provides weather reports and forecasts floods and hurricanes and (NOAA NOAA abbr. National Oceanic and Atmospheric Administration Noun 1. NOAA - an agency in the Department of Commerce that maps the oceans and conserves their living resources; predicts changes to the earth's environment; ) and their families and its focused mission of serving its members. Fitch views as additional strengths NMAA's conservative reserving, outstanding persistency and low mortality, consistently low expense ratios and a high quality, liquid bond portfolio. Fitch views as partially offsetting these strengths NMAA's adjusted surplus volatility that is caused by a moderately higher than industry allocation Industry allocation Investment of certain proportions of a portfolio in certain industries. Sometimes called sector allocation. to common stocks. In 2003 adjusted statutory surplus rebounded strongly to $121 million due primarily to unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. in NMAA' common stock portfolio and modest operating gains, but over the past five years changes in year-to-year reported adjusted surplus have been mixed due primarily to the changes in market value of its equity portfolio. Fitch also notes that NMAA's longer than average bond portfolio duration has played a role in maintaining the association's strong investment yield in recent years at the expense of higher interest rate risk. Fitch believes that NMAA's 'war risk' is being prudently managed and that mortality experience is within expectations despite the current conflict in Iraq. While NMAA operates by charter in a concentrated customer market, it has broadened its field of membership in recent years to include children and grandchildren GRANDCHILDREN, domestic relations. The children of one's children. Sometimes these may claim bequests given in a will to children, though in general they can make no such claim. 6 Co. 16. of members. NMAA estimates that less than 20% of its current in-force book of business is currently eligible for 'war risk'. Fitch considers NMAA's $49.9 million voluntary reserve for war and other adverse deviations as additional support for the rating. Fitch views NMAA's operating performance over the past three years as good, characterized by consistent, moderate pre-dividend gains from operations and moderate premium growth. Key drivers were lower policyholder dividend rates in response to the continued low interest rate environment, low expense levels, good investment income and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. persistency. Fitch also notes NMAA's controlled entry into the individual annuity market with three product options for its membership. Navy Mutual Aid Association is headquartered in Arlington, Va., and reported total admitted assets of $1.7 billion and adjusted surplus of $121 million at Dec. 31, 2003. The association currently has more than 100,000 members and more than $11.9 billion of insurance in force as of December 2003. Entity/Issue/Type Action Rating/Outlook Navy Mutual Aid Association -- Insurer financial strength Affirm 'A+'/Stable |
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