OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” of Oxford Life Insurance Company (Oxford Life) (Phoenix, AZ) and its subsidiary, Christian Fidelity Life Insurance Company (Dallas, TX), collectively referred to as Oxford Group. A.M. Best also has affirmed the FSR of B++ (Good) and the Long-Term ICR of “bbb” of North American Insurance Company (Madison, WI). The outlook of these Credit Ratings (ratings) is stable. These companies are owned by the ultimate parent, AMERCO [NASDAQ: UHAL], which is also the parent of U-Haul International, Inc., North America’s leading “do-it-yourself” household moving and self-storage operator.

The ratings of the Oxford Group reflect the group’s balance sheet strength, which A.M. Best categorizes as strongest, its adequate operating performance, limited business profile, and appropriate enterprise risk management (ERM).

Oxford Group’s risk-adjusted capitalization benefits from favorable Best’s Capital Adequacy Ratios (BCAR), financial flexibility and the potential of capital support from its parent, AMERCO, which has benefited from tax reform and an improving economy. The group has been successful in its business strategy of serving senior markets by offering annuities, final expense and Medicare supplement insurance. Organic earnings growth is being driven primarily through significant annuity sales growth and favorable operating results from the Medicare supplement line of business.

Partially offsetting these positive rating factors are the competitive challenges Oxford faces from larger insurance entities in its core lines. Statutory earnings have been compressed partially due to statutory strain from new business growth and ongoing spread compression. Finally, Oxford Group maintains a high level of interest sensitive reserves on its balance sheet with only a small proportion of annuities at high minimum guaranteed crediting rates. This has continued to decline as new business is originated with low minimum guarantees.

The ratings of North American Insurance Company, which has been placed in runoff, reflect its balance sheet strength, which A.M. Best categorizes as strong, its adequate operating performance, very limited business profile, and appropriate ERM.

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