OLDWICK, N.J.–(BUSINESS WIRE)–AM 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), which are collectively referred to as Oxford Group. The outlook of these Credit Ratings (ratings) is positive. Concurrently, AM Best 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 ratings is stable. These companies are owned by the group’s 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 Oxford Group reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings are supported by Oxford Group’s excellent risk adjusted capitalization and overall solid operating trends. The ratings also reflect the group’s increasingly diversified business profile within the senior market following Oxford Group’s execution of its business strategy in the annuity, final expense and Medicare supplement insurance marketplace. Oxford Group has a conservative investment portfolio that continues to produce consistent net investment income.

Partially offsetting these positive factors are the significant competitive challenges that Oxford Group faces from larger insurance entities in its core lines. Moreover, the sustained low interest environment continues to pressure performance for interest-rate sensitive products, industry-wide. Oxford maintains a high level of interest-sensitive reserves on its balance sheet, although AM Best notes that the large majority of Oxford’s annuity business was written with relatively low minimum guarantees. Finally, the currently high degree of economic uncertainty reduces earnings visibility for life and annuity writers and increases the possibility of asset impairments.

Continuation of the positive outlook reflects Oxford’s increasingly diversified business profile, stable operating results and consistently supportive levels of risk-adjusted capitalization. A positive rating action may occur if the group continues to produce profitable premium growth while maintaining its relative market positions in its key business lines.

The ratings of North American Insurance Company, which is currently in runoff, reflect its balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, very limited business profile and appropriate enterprise risk management.

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