A.M. Best Affirms Ratings of Protective Life Corporation
June 02 2008 - 2:27PM
Business Wire
A.M. Best Co. has affirmed the financial strength rating (FSR) of
A+ (Superior) and issuer credit ratings (ICR) of �aa� of Protective
Life Corporation�s (Protective) (Birmingham, AL) [NYSE: PL] direct
and indirect life/health subsidiaries led by Protective Life
Insurance Company (PLIC) (Tennessee). Concurrently, A.M. Best has
affirmed the ICR of �a� and debt ratings of Protective. In
addition, A.M. Best has affirmed the debt ratings of the
outstanding notes issued for the various funding agreement-backed
securities (FABS) programs of PLIC. A.M. Best also has affirmed the
FSR of A- (Excellent) and ICR of �a-� of Protective�s indirect
property/casualty subsidiary, Lyndon Property Insurance Company
(St. Louis, MO). The outlook for all ratings is stable. (Please see
link below for a detailed listing of the companies and ratings.)
Protective�s ratings reflect its consistent earnings performance,
diversified revenue and profit sources, broad distribution
capabilities, historically solid risk-adjusted capitalization and
superior investment performance. The ratings also acknowledge
Protective�s success in deploying excess capital via acquisition
and effectively integrating acquired insurance companies and blocks
of business. Protective�s steady sales and profitability are
supported by its diversified network of non-captive distribution
channels and its well-managed growth strategy. In addition,
Protective�s acquisitions have increased its earnings and allowed
the organization to enter new markets and realize certain operating
efficiencies. Protective maintains a high-quality, diversified
investment portfolio, which has experienced a significantly lower
level of realized losses on sales and impairments than many of its
peers. While the ratings recognize Protective�s strong and diverse
business profile, A.M. Best notes that a few of the group�s product
lines are not material in size or synergy with Protective�s core
businesses. Furthermore, a significant portion of its GAAP and
statutory earnings are generated by segments that are somewhat
opportunistic and products that are commoditized in nature.
Additionally, Protective�s all-in financial
leverage�senior-plus-subordinated debt�is slightly over 30% and
near the upper end of the range for its current ratings. However,
Protective�s interest coverage is strong at approximately eight
times, partially mitigating A.M. Best�s financial leverage
concerns. For a complete listing of Protective Life Corporation�s
FSRs, ICRs and debt ratings, please visit
www.ambest.com/press/060208protective.pdf. Founded in 1899, A.M.
Best Company is a global full-service credit rating organization
dedicated to serving the financial and health care service
industries, including insurance companies, banks, hospitals and
health care system providers. For more information, visit
www.ambest.com.
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