DUFF & PHELPS: AMERICAN INVESTORS LIFE INSURANCE COMPANY CLAIMS PAYING ABILITY RATING REAFFIRMED AT 'A'
CHICAGO, Aug. 16 /PRNewswire -- Duff & Phelps Credit Rating Co. has reaffirmed the "A" (Single-A) claims paying ability rating of American Investors Life Insurance Company. This rating action reflects American Investors' expertise in its chosen market, as well as, the continued improvement in investment portfolio quality and in the parent holding company's financial leverage. American Investors Life is a stock life insurance company that has headquarters in Topeka, KS. The company is a wholly owned subsidiary of AmVestors Financial Corp. (AVFC), a publicly held holding company traded on NASDAQ. American Investors Life specializes in writing single premium deferred annuities (SPDA) for individuals who are approaching retirement age through a distribution force of over 5,000 independent brokers. AVFC reported assets of $2.0 billion and stockholders' equity of $57.1 million at March 31, 1993. The company also had $16.8 million in outstanding bank debt at March 31, 1993, corresponding to a debt to total capital ratio of 22.8 percent. The level of bank debt has sharply declined from a level of $28.4 million at yearend 1991. AVFC plans to issue up to $35 million in new common equity during 1993. Proceeds from the offering would be used to repay all remaining bank debt and to provide capital for future growth at American Investors Life. American Investors Life reported statutory admitted assets of $1.8 billion and adjusted surplus of $98.9 million at year end 1992. While premium volume has declined and statutory earnings have been below expectations for the last two years, American Investors Life balance sheet has improved significantly. The investment exposure to non-investment grade bonds was reduced to 5 percent of all fixed income investments at year end 1992 from 13 percent at year end 1990. Statutory operating leverage, as measured by the ratio of adjusted liabilities to adjusted surplus has also improved to 17.5 times in 1992 from 19.9 times in 1990. Operating earnings are expected to gradually improve as interest margins have increased due primarily to reductions in annuity crediting rates. -0- 8/16/93 /CONTACT: James B. Auden, CFA, 312-368-3146, of Duff & Phelps Credit Rating Co./
CO: American Investors Life Insurance Company ST: Kansas IN: INS SU: RTG
LG -- NY051 -- 3002 08/16/93 10:56 EDT
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|Date:||Aug 16, 1993|
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