AM Best Upgrades Credit Ratings of Madison National Life Insurance Company; Affirms Credit Ratings of Horace Mann Educators Corporation and Remaining Subsidiaries
August 10 2023 - 2:12PM
Business Wire
AM 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” (Excellent) from “a-”
(Excellent) of Madison National Life Insurance Company (Madison
National Life) (Madison, WI). At the same time, AM Best has
affirmed the FSR of A (Excellent) and the Long-Term ICR of “a”
(Excellent) of the property/casualty (P/C) members of Horace Mann
Insurance Group (Horace Mann), and Horace Mann Life Insurance
Company (Horace Mann Life). In addition, AM Best has affirmed the
FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) of
National Teachers Associates Life Insurance Company (Addison, TX)
and its affiliated entity, NTA Life Insurance Company of New York
(New York, NY) (collectively referred to as NTA Life). Lastly, AM
Best has affirmed the Long-Term ICR of “bbb” (Good) of Horace Mann
Educators Corporation (HMEC) [NYSE: HMN] and the Long-Term Issue
Credit Rating of “bbb” (Good) on its $250 million, 4.5% senior
unsecured notes, due 2025. The outlook of these Credit Ratings
(ratings) is stable. All companies are headquartered in
Springfield, IL, unless otherwise specified. (See below for a
detailed list of the P/C subsidiaries).
The ratings of Madison National Life reflect its balance sheet
strength, which AM Best assesses as very strong, as well as
adequate operating performance, limited business profile and
appropriate enterprise risk management (ERM). The ratings also
reflect support the company receives from its parent, HMEC, and
full integration of their operations. Madison National Life’s
products are complementary to Horace Mann’s property/casualty, life
and supplemental products.
The ratings of Horace Mann reflect the group’s balance sheet
strength, which AM Best assesses as strongest, as well as its
adequate operating performance, neutral business profile and
appropriate ERM.
Horace Mann maintains the strongest level of risk-adjusted
capitalization, as measured by Best’s Capital Adequacy Ratio
(BCAR), which benefits from a diversified investment portfolio and
conservative reserving practices. Operating performance has been
driven by consistent net investment income, mostly offset by
underwriting losses in the group’s property/casualty operations
over the last 18 months. Underwriting results continue to be
impacted by significant catastrophe losses due to severe weather
events. Additionally, combined ratios are being pressured by rising
loss costs, largely driven by inflation in the auto and property
lines. The group is taking significant underwriting and rate
actions to restore profitability.
The ratings of Horace Mann Life reflect its balance sheet
strength, which AM Best assesses as strong, as well as its strong
operating performance, neutral business profile and appropriate
ERM.
Horace Mann Life has established itself as one of the largest
providers of 403(b) tax-qualified fixed and variable annuities in
the United States, focused on educators as its primary market. The
company continues to report solid net income over the past five
years, which has contributed to capital and surplus growth.
Operating performance is enhanced by favorable persistency, cost
reduction initiatives and increased agent productivity. Horace Mann
Life offers a diversified mix of life, annuities and retirement
products.
The ratings of NTA Life reflect its balance sheet strength,
which AM Best assesses as very strong, as well as its adequate
operating performance, limited business profile and appropriate
ERM. The ratings also reflect support the company receives from its
parent, HMEC, and full integration of its operations.
NTA Life maintains the very strong level of risk-adjusted
capitalization, as measured by BCAR. The company has reported
consistent net income and strong profitability ratios. NTA Life’s
product mix added to Horace Mann’s already diverse suite of
products brings additional complementary products to better meet
the needs of educators.
The FSR of A (Excellent) and the Long-Term ICRs of “a”
(Excellent) have been affirmed with stable outlooks for the
following P/C members of Horace Mann Insurance Group:
- Horace Mann Insurance Company
- Horace Mann Property & Casualty Insurance Company
- Teachers Insurance Company
- Horace Mann Lloyds
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 Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Joni Cerbone Senior Financial Analyst +1 908
882 1690 joni.cerbone@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Rosemarie Mirabella Director +1 908 882
2125 rosemarie.mirabella@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com
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