A.M. Best Comments on Credit Ratings of Kansas City Life Insurance Company Following Announced Acquisition
June 4, 2018 by A.M. Best
Oldwick – A.M. Best has commented that the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” of Kansas City Life Insurance Company (Kansas City Life) remain unchanged following the company’s announced acquisition of Grange Life Insurance Company (Grange Life), domiciled in Columbus, OH. Concurrently, A.M. Best has commented that the FSR of A- (Excellent) and the Long-Term ICRs of “a-” of Kansas City Life’s wholly owned subsidiary, Sunset Life Insurance Company of America, and its final expense life insurance subsidiary, Old American Insurance Company, remain unchanged. The outlook of these Credit Ratings (ratings) remains stable. All companies are domiciled in Kansas City, MO, unless otherwise specified.
The announced acquisition of Grange Life by Kansas City Life will further enhance the ordinary life business of Kansas City Life, which A.M. Best considers to be of higher creditworthiness. The acquisition also will enhance and expand Kansas City Life’s distribution presence and has the potential to create future cross-selling opportunities that would aid the overall business profile. While the cost of the acquisition will initially lessen the risk-adjusted capital level of Kansas City Life, A.M. Best believes that its assessment of its risk-adjusted capitalization and overall balance sheet strength will remain at strong following the closing of the acquisition. In addition, Grange Life would be accretive to Kansas City Life’s earnings in the future and therefore, the near-term negative impact to its risk-adjusted capital would be earned back over time and aided by realized synergies achieved by the acquisition. Despite the inherent execution risk, A.M. Best notes that Kansas City Life’s management team has a track record of successful acquisitions and taking on blocks of business that have proven to contribute positively to the organization, and this acquisition is consistent with management’s strategy.
This press release relates to Credit Ratings 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 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 A.M. Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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