A.M. Best Revises Outlook to Stable for Ameritas Life Insurance Corp. and Subsidiary
March 7, 2016 by Best's News Service
Oldwick – A.M. Best has revised the outlook to stable from positive and affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of “a+” of Ameritas Life Insurance Corp. (Ameritas Life) (Lincoln, NE) and Ameritas Life Insurance Corp. of New York (Ameritas NY) (New York, NY). These insurance entities comprise the life/health operations of Ameritas Mutual Holding Company (Ameritas). Concurrently, A.M. Best has revised the outlook to stable from positive and affirmed the “a-” issue rating on the group’s existing surplus notes.
The revised outlooks reflect the modest top and bottom line growth that the company has reported over the past few years, as well as the headwinds to growth in the near to medium term. Additionally, Ameritas has reported higher than expected mortality and morbidity in certain of its core lines of business over the past 12-month period. The company’s Financial Division, which includes its Calvert operations, continues to experience headwinds in the current economic environment and A. M. Best believes the company will remain challenged to grow profitability in this segment over the medium term. Additional pressures exist in the company’s Group insurance division, driven by the continued competitive environment within the group dental market.
The rating affirmation reflects Ameritas’ continued strong risk-adjusted capitalization and balance sheet, the diversity of both its products and distribution sources, and the company’s continued profitability.
Additionally, Ameritas has announced several acquisitions more recently, which will afford the company further diversification and scale in core lines of business going forward. Ameritas maintains more than adequate risk-adjusted capital for its level of insurance and investment risks. Historically the company’s core operations have been centered on products that are considered more creditworthy, with Ameritas being a recognized competitor in the group and individual dental, vision and annuity market, as well as the ordinary life market. Ameritas maintains a well-diversified investment portfolio, with below industry exposure to higher-risk assets.
The outlook for the following issue rating has been revised to stable from positive and affirmed:
The Union Central Life Insurance Company (merged into Ameritas Life eff. July 1, 2014)—
— “a-” on $50 million 8.20% surplus notes, due 2026
This press release relates to rating(s) 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 Activityweb page.
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