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A.M. Best Affirms Ratings of Western Life Assurance Company.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of B++ (Good) and the issuer credit rating (ICR) of "bbb+" of Western Life Assurance Company (Western Life) (High River, Alberta). The outlook for both ratings is stable.

The ratings reflect Western Life's trend of increasing operating earnings and premium production, stable capitalization and low levels of credit risk in its balance sheet. Western Life has reported growth in its key product segments, with the core group accident and sickness the largest segment by premium income and earnings. The steady stream of earnings has led to a very good risk-adjusted capital level. The company's transition to its new ownership under Western Financial Group Inc. presents increased business opportunities, and elevated business production is expected from affiliated distribution going forward.

Offsetting the positive rating factors are the challenges associated with achieving greater market share in the Canadian arena due to competition in the group and the individual accident and sickness market. Despite recent growth, Western Life has yet to achieve meaningful economies of scale. In addition, Western Life's parent's strategy of acquisitions has historically generated considerable levels of leverage and intangibles. Finally, the company's absolute capital position is relatively modest, requiring the company to utilize increasing levels of reinsurance to fund its growth.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.
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Publication:Business Wire
Date:Jun 5, 2008
Words:267
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