AM Best Removes From Under Review With Developing Implications & Affirms Credit Ratings of Kemper Corp. & Most of Its Subsidi...
January 18 2019 - 4:52PM
Business Wire
AM Best has removed from under review with developing
implications and affirmed the Financial Strength Rating (FSR) of A-
(Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR)
of “a-” of the property/casualty subsidiaries and affiliated
insurance companies of Kemper Corporation (Kemper Corp.)
[NYSE:KMPR], collectively referred to as Kemper Property &
Casualty Group (Kemper P&C). AM Best also has removed from
under review with developing implications and affirmed the FSR of
A- (Excellent) and the Long-Term ICR of “a-” of Kemper Corp.’s
life/health subsidiaries, collectively referred to as Kemper Life
& Health Group (Kemper L&H). Concurrently, AM Best has
removed from under review with developing implications and affirmed
the Long-Term ICR of “bbb-”, as well as the Long-Term Issue Credit
Ratings (Long-Term IR) of Kemper Corp., the ultimate holding
company. The outlook assigned to these Credit Ratings (ratings) is
stable. All companies are headquartered in Chicago, IL, unless
otherwise specified.
AM Best also has removed from under review with negative
implications and downgraded the FSR to A- (Excellent) from A
(Excellent) and the Long-Term ICR to “a-” from “a” of Infinity
Property and Casualty Corporation’s (Infinity P&C Corp.)
subsidiaries, as well as the Long-Term ICR and the Long-Term IR to
“bbb-” from “bbb” of Infinity P&C Corp. These rating actions
follow the close of Kemper Corp.’s acquisition of Infinity P&C
Corp. and its subsidiaries (headquartered in Birmingham, AL) in
July 2018, the successful execution of related intercompany
reinsurance agreements, which became effective Dec. 1, 2018 and the
conclusion of AM Best’s overall assessment of the impact of these
events. As a result, certain Infinity P&C Corp. subsidiaries
became members of Kemper P&C. The outlook assigned to all of
these Credit Ratings (ratings) is stable. See below for a detailed
listing of all companies and ratings.
The Kemper P&C ratings reflect its balance sheet strength,
which AM Best categorizes as very strong, as well as its adequate
operating performance, neutral business profile and appropriate
enterprise risk management (ERM). Kemper P&C’s rating
affirmations are attributable to its very strong level of
risk-adjusted capitalization, evolving risk management practices
and its strengthened position as one of the leading nonstandard
auto writers in the United States, following its recent
acquisition.
The Kemper L&H ratings reflect its balance sheet strength,
which AM Best categorizes as very strong, as well as its adequate
operating performance, neutral business profile and appropriate
ERM.
Kemper L&H’s rating affirmations were driven by its very
strong level of risk-adjusted capitalization, favorable capital to
liability ratio, and a steady, meaningful and diverse source of
earnings to Kemper Corp. Furthermore, Kemper L&H’s broad array
of product including basic life insurance, final expense, limited
accident and health benefits and other supplemental products also
is driving the rating affirmations.
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” have
been removed from under review with developing implications and
affirmed, with assigned outlooks of stable, for the following
members of the Kemper Property & Casualty Group:
- Trinity Universal Insurance Company
(Dallas, TX)
- Alpha Property & Casualty Insurance
Company
- Capitol County Mutual Fire Insurance
Company
- Charter Indemnity Company
- Financial Indemnity Company
- Kemper Independence Insurance
Company
- Merastar Insurance Company
- Mutual Savings Fire Insurance
Company
- Kemper Financial Indemnity Company
- Old Reliable Casualty Company
- Response Insurance Company
- Response Worldwide Direct Auto
Insurance Company
- Response Worldwide Insurance
Company
- Union National Fire Insurance
Company
- United Casualty Insurance Company of
America
- Unitrin Advantage Insurance
Company
- Unitrin Auto and Home Insurance
Company
- Unitrin County Mutual Insurance
Company
- Unitrin Direct Insurance Company
- Unitrin Direct Property & Casualty
Company
- Unitrin Preferred Insurance
Company
- Unitrin Safeguard Insurance
Company
- Valley Property & Casualty
Insurance Company
- Warner Insurance Company
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” have
been removed from under review with developing implications and
affirmed, with assigned outlooks of stable, for the following
members of Kemper Life & Health Group:
- United Insurance Company of
America
- Mutual Savings Life Insurance
Company
- The Reliable Life Insurance
Company
- Union National Life Insurance
Company
- Reserve National Insurance Company
The FSR has been removed from under review with negative
implications and downgraded to A- (Excellent) from A (Excellent)
and the Long-Term ICRs downgraded to “a-” from “a” and stable
outlooks assigned for the following new members of the Kemper
Property & Casualty Group:
- Infinity Insurance Company
- Infinity Assurance Insurance
Company
- Infinity Auto Insurance Company
- Infinity Casualty Insurance
Company
- Infinity Indemnity Insurance
Company
- Infinity Preferred Insurance
Company
- Infinity Safeguard Insurance
Company
- Infinity Security Insurance
Company
- Infinity Select Insurance Company
- Infinity Standard Insurance
Company
- Infinity County Mutual Insurance
Company
The following Long-Term IRs have been removed from under review
with developing implications and affirmed with a stable outlook
assigned:
Kemper Corporation—-- “bbb-” on $450 million 4.35% senior
unsecured notes, due 2025-- “bb+” on $150 million 7.375%
subordinated debentures, due 2054
The following indicative Long-Term IRs for securities available
under the shelf registration have been removed from under review
with developing implications and affirmed with a stable outlook
assigned:
Kemper Corporation—-- “bbb-” on senior unsecured debt-- “bb+” on
subordinated debt-- “bb” on preferred stock
The following Long-Term IR has been removed from under review
with negative implications and downgraded with a stable outlook
assigned:
Infinity Property and Casualty Corporation—-- to “bbb-” from
“bbb” on $275 million 5% senior unsecured notes, due September
2022
This press release relates to Credit Ratings that have been
published on AM 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 AM 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 AM
Best press releases, please view Guide for Media - Proper
Use of Best’s Credit Ratings and AM Best Rating Action Press
Releases.
AM 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 © 2019 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/20190118005530/en/
Michael T. VeneziaSenior Financial Analyst –
P/C+1 908 439 2200, ext.
5034michael.venezia@ambest.com
Christopher SharkeyManager, Public Relations+1
908 439 2200, ext. 5159christopher.sharkey@ambest.com
Bruno Caron, FSA, MAAASenior Financial Analyst –
L/H+1 908 439 2200, ext. 5144bruno.caron@ambest.com
Jim PeavyDirector, Public Relations+1 908 439
2200, ext. 5644james.peavy@ambest.com
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