A.M. Best Affirms Ratings of National Western Life Insurance Company
June 13 2008 - 9:25AM
Business Wire
A.M. Best Co. has affirmed the financial strength rating (FSR) of
A- (Excellent) and issuer credit rating (ICR) of �a-� of National
Western Life Insurance Company (NWL) (Denver, CO) (NASDAQ: NWLIA).
The outlook for both ratings remains positive. These rating actions
reflect NWL�s diverse business profile of accepting applications
from residents both in the United States and in various
international territories, its solid operating results, superior
risk-adjusted capitalization and increasing statutory adjusted
capital and surplus and GAAP equity trends. Offsetting these
strengths are the challenges for NWL to manage its increasing
exposure to interest sensitive annuity and universal life
liabilities and continuing to grow its domestic and international
ordinary life businesses. In maintaining the positive outlook, A.M.
Best recognizes NWL�s strong competitive position internationally,
which continues to provide diversification of revenue, insurance
risk and profitable earnings. The outlook also reflects
management�s efforts to continue to grow its U.S. domestic ordinary
life segment, which A.M. Best believes can provide further
diversification of NWL�s business and earnings profile, as well as
its ongoing efforts to further enhance and refine its
asset/liability and enterprise risk management processes. NWL�s net
premium and deposit growth has been driven mainly by sales of its
fixed-indexed annuity (FIA) products. While NWL�s annuity growth
has resulted in greater interest rate and equity market risks, the
company�s strong risk-adjusted capitalization, surrender charge
protection and market value adjustment features partially mitigate
these risks. In noting NWL�s growth in FIAs, A.M. Best recognizes
NWL�s prudent product design and customer profiles, effective
hedging programs and active market conduct and compliance programs.
However, A.M. Best remains cautious over the potential declines in
the industry�s future FIA sales and its impact on earnings given
the increasing due diligence demanded to comply with the prevailing
heightened regulatory environment. For Best�s Ratings, an overview
of the rating process and rating methodologies, please visit
www.ambest.com/ratings. 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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