A.M. Best Upgrades Credit Ratings of Certain American National Group Members; Affirms Credit Ratings of American National Ins...
November 09 2018 - 11:03AM
Business Wire
A.M. Best has upgraded the Financial Strength Rating
(FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer
Credit Rating (Long-Term ICR) to “a+” from “a-” of American
National Life Insurance Company of Texas. A.M. Best also has
upgraded the Long-Term ICRs to “a+” from “a” and affirmed the FSR
of A (Excellent) of American National Life Insurance Company of New
York (Glenmont, NY) and Standard Life and Accident Insurance
Company. In addition, A.M. Best has affirmed the FSR of A
(Excellent) and the Long-Term ICR of “a+” of American National
Insurance Company (ANICO) [NASDAQ: ANAT]. These companies are
collectively referred to as American National Group (ANG). A.M.
Best also has affirmed the FSR of A (Excellent) and the Long-Term
ICR of “a” of Garden State Life Insurance Company (League City,
TX). The outlook of these Credit Ratings (ratings) is stable. All
the above companies are headquartered in Galveston, TX unless
otherwise noted.
The ratings reflect ANG’s balance sheet strength, which A.M.
Best categorizes as strongest, as well as its adequate operating
performance, favorable business profile and appropriate enterprise
risk management (ERM).
The ratings also reflect ANG’s high absolute and risk-adjusted
capitalization, which is the result of organic earnings growth,
overall good credit quality of invested assets, low use of
reinsurance and modest financial leverage. ANG markets life,
annuity, disability and accident and health products through
multiple distribution channels, each tailored to a particular
target market. In addition, ANG’s ERM program is based on the
evaluation of risks and its overall financial impact of the group,
with risk identification and reporting embedded in its corporate
structure.
However, ANG’s statutory earnings have been positive but lower
over the past several years primarily due to new business strain
and lower interest rates, which has impacted individual annuity
spreads. Annuity reserves account for nearly 70 percent of its
general account reserves, which may lead to spread compression risk
if interest rates remain low and disintermediation risk if interest
rates rise. Partially mitigating this factor is the group’s sound
liquidity management and strong liquidity metrics. Lastly, the
group has increased allocations to more volatile and/or less liquid
asset types in recent years to gain yield, such as mortgages and
other invested assets.
On Jan. 1, 2018, Farm Family Life Insurance Company merged with
American National Life Insurance Company of New York, which was
then a wholly owned subsidiary of ANICO, with the surviving entity
being rebranded as American National Life Insurance Company of New
York.
In addition, A.M. Best has affirmed the FSR of A (Excellent) and
the Long-Term ICRs of “a” of American National Property and
Casualty Company (Springfield, MO), its subsidiaries, American
National General Insurance Company (Springfield, MO), ANPAC
Louisiana Insurance Company (Mandeville, LA), American National
Lloyds Insurance Company (Galveston, TX), Pacific Property and
Casualty Company (San Jose, CA) and its affiliate, American
National County Mutual Insurance Company (Galveston, TX). These
entities are all considered part of American National Property and
Casualty Group (ANPAC Group) due to their strategic importance. At
the same time, A.M. Best has affirmed the FSR of A (Excellent) and
the Long-Term ICRs of “a” of Farm Family Casualty Insurance Company
and United Farm Family Insurance Company (Farm Family) (both
domiciled in Glenmont, NY). The outlook of these ratings is stable.
These companies are property/casualty subsidiaries of their
ultimate parent, ANICO.
The ratings reflect ANPAC Group’s balance sheet strength, which
A.M. Best categorizes as very strong, as well as its marginal
operating performance, neutral business profile and appropriate
ERM.
The ratings reflect Farm Family’s balance sheet strength, which
A.M. Best categorizes as very strong, as well as its adequate
operating performance, neutral business profile and appropriate
ERM.
Furthermore, the ratings reflect these groups’ generally
favorable operating earnings and extensive market knowledge as a
national writer. The ratings also reflect the continued support
provided by the ultimate parent, ANICO, and the synergies generated
amongst these groups and their parent. Partially offsetting these
rating factors are the competitive market conditions and the
potential impact on capitalization from significant catastrophe
losses, which is mitigated somewhat by comprehensive reinsurance
protection.
This press release relates to Credit Ratings that have been
published on A.M. Best’s website. For all rating information
relating to the release and pertinent disclosures, including
details of the office responsible for issuing each of the
individual ratings referenced in this release, please see A.M.
Best’s Recent Rating Activity web page. For
additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit
Ratings. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is a global rating agency and information provider
with a unique focus on the insurance industry. Visit
www.ambest.com for more information.
Copyright © 2018 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20181109005402/en/
A.M. BestFrank Walko CPAFinancial
Analyst—L/H+1 908 439 2200, ext.
5072frank.walko@ambest.comorMichael T.
VeneziaSenior Financial Analyst—P/C+1 908 439 2200,
ext. 5034michael.venezia@ambest.comorChristopher
SharkeyManager, Public Relations+1 908 439 2200, ext.
5159christopher.sharkey@ambest.comorJim
PeavyDirector, Public Relations+1 908 439 2200, ext.
5644james.peavy@ambest.com
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