Top

This American Life

February 15, 2011 by  

This American Life, AM Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” Great American Life Insurance Company (Galicia) and Annuity Investors Life Insurance Company (AILIC), a company pension Key Great American Financial Resources, Inc. (GAFRI), which is a wholly owned subsidiary of American Financial Group, Inc. (AFG) [NYSE: AFG]. In addition, AM Best affirmed the FSR and ICRs of complementary health subsidiaries of GAFRI. The outlook for all ratings is stable. All the above companies are headquartered in Cincinnati, OH. (See below for a detailed list of companies and ratings.).

The rating affirmations subsidiaries GAFRI annuity principal to reflect the growth of high-end business, improved operating income and strong statutory capitalization. GALIC and its wholly owned subsidiary, AILIC, reported a significant increase in single premium fixed and indexed annuity products in 2010. During the first half of the year, both companies were able to become more competitive prices due to opportunistic investment activities. Accordingly, GALIC AILIC reported record deposits and fixed annuities in 2010, driven by sales by banks. The sharp increase in annuity sales has greatly improved GAFRI to report operating profit legal.

While sales of fixed and indexed annuities were strong, AM Best remains concerned about ongoing challenges within the premium 403 (b) market. The uncertainty of the 403 (b) market for public education, particularly recent layoffs and budget constraints in the public school system, led to a reduction in premiums in the 403 (b) arena. Accordingly, the first-year premiums in the GAFRI 403 (b) the market has declined significantly in 2010. AM Best notes that the persistence of group annuity products on two levels has been relatively strong, helps maintain overall growth. In addition, annuity companies continue to have a significant exposure to investment obligations of the financial sector of the business and real estate related investments, in particular, non-agency residential mortgage-backed securities (RMBS) – whose valuations continue to suffer stress. However, AM Best’s concerns are mitigated by the strong capitalization of these companies and the strategic importance of the AFG.

Corporate ratings GAFRI additional services to recognize the ongoing challenges they face to profitably grow their business. As such, AM Best believes that health matters are not complementary to the heart of the organization’s strategy of providing long-term financial solutions for all stages of life. The lines of additional services to continue to provide some income and income diversification for GAFRI, but this percentage has decreased compared to the focus group’s tax-sheltered annuity. In 2010, approximately 15% of consolidated statutory net premiums and nearly 17% of GAAP earnings from operations before taxes were generated by segment GAFRI additional health.

Historically, levels of operating performance and capitalization of the unity of complementary health fluctuated and trends are generally flat to declining. The individual health business, primarily health insurance supplement, continues to represent the majority of sales in progress and exposes companies to significant pressure from regulatory and competition associated with that product. In addition, GAFRI additional benefits companies are no longer actively marketing life insurance policy or long-term care and de-emphasized annuity sales.

The FSR of A SVR (Excellent) and “a” have been confirmed for life following subsidiaries of Health / Great American Financial Resources, Inc.:

Annuity Investors Life Insurance Company

Great American Life Insurance Company

The FSR of A- (Excellent) and ICRs of “a-” have been confirmed for life following subsidiaries of Health / Great American Financial Resources, Inc.:

Great American Life Insurance Company of New York
Loyal American Life Insurance Company
Manhattan Corporation National Life Insurance
The FSR of B + + (Good) and ICRs of “BBB +” have been confirmed for life following subsidiaries of Health / Great American Financial Resources, Inc.:

American Insurance Company for life in retirement
Great American Life Insurance Company
United Teacher Associates Insurance Company
The FSR of B + + (Good) and ICRs of “BBB” have been confirmed for life following subsidiaries of Health / Great American Financial Resources, Inc.:

Central Reserve Life Insurance Company
Continental General Insurance Company
American Life Insurance Company pension and health
The main method used to determine these ratings is Best Credit Rating Methodology – Global Life and Non-Life Insurance Edition, which provides a detailed explanation of the AM Best rating process and highlights the different scoring criteria employed. Other key criteria used include: “Managing risk and rating process for insurance companies,” Understanding BCAR for Life and Health Insurers, “Evaluation of Health Insurance Companies” and ” Evaluation of members of insurance groups. “Methodologies can be found at www. Ambest.com / ratings / methodology.

Founded in 1899, AM Best Company is the insurance rating of the world oldest and most authoritative source and information. For more information, visit www.ambest.com.

Report to Team

_________________________________________
Please feel free to send if you have any questions regarding this post , you can contact on

usspost@gmail.com

Disclaimer: The views expressed on this site are that of the authors and not necessarily that of U.S.S.POST.

Comments

Comments are closed.

Bottom