Company Website:
http://www.ambest.com
OLDWICK, N.J. -- (Business Wire)
A.M. Best has affirmed the financial strength ratings (FSR) of A-
(Excellent) and the issuer credit ratings (ICR) of “a-” of American
Health and Life Insurance Company (AHLIC) and Sears Life
Insurance Company (Sears Life). Concurrently, A.M. Best has affirmed
the FSR of A (Excellent) and the ICR of “a” of Triton Insurance
Company (Triton). The outlook for all ratings is stable. These
companies are ultimately owned by Citigroup Inc. [NYSE:C]. All
companies are domiciled in Fort Worth, TX.
AHLIC’s ratings reflect increasing trends in premium for its core
products, favorable capitalization, partially offset by the company’s
continued exposure to downturns in the financial products marketplace,
and parental dividend payments. AHLIC is included in Citi Holdings,
which are businesses and portfolios of assets that Citigroup Inc. has
determined are not central to its core business. On Oct. 8, 2014,
Citigroup, Inc. filed an SEC “Form S-1” to begin the formal process for
the potential initial public offering of OneMain Financial Holdings,
Inc. (OneMain Financial), the parent of AHLIC, Sears Life and Triton.
A.M. Best notes that AHLIC’s top line premium growth increased in 2013
and the trend has continued so far in 2014, triggered by increasing
average loan volumes. In 2012, AHLIC no longer sold real estate loan
business, and as a result, is in the process of replacing this net
revenue with personal loan business from OneMain Financial and
CitiFinancial Canada, Citigroup Inc.’s consumer finance business.
However, capital and surplus has remained relatively flat due to large
dividend payments to Citigroup Inc., with the objective to right size
its capital balance and maintain above average risk-based capital
ratios. In addition to strong capital ratios, AHLIC reports consistently
positive statutory operating results and continued sales of its core
credit products and other specialty products.
The ratings of Sears Life acknowledge its strong risk-adjusted
capitalization and continuing operating profitability. These positive
rating factors are offset by Sears Life’s nominal business position
within Citi Assurance Services, Inc. (CAS) and its anticipated future
declining trends in life/health premium activities and earnings.
The ratings of Triton, CAS’ property/casualty operation, recognize its
historically strong operating performance, superior risk-adjusted
capitalization, management’s expertise in consumer finance-oriented
products and the business opportunities derived from its affiliates,
OneMain Financial and CitiFinancial Canada.
Partially offsetting these positive rating factors are Triton’s
distribution dependence on OneMain Financial and CitiFinancial Canada
and the underwriting sensitivity of its involuntary unemployment
insurance business regarding initial unemployment claims filed in the
United States and Canada. This is evidenced by Triton’s substantially
lower underwriting profitability in 2008 and 2009, and its rebound in
underwriting profitability in more recent years.
Positive rating movement is unlikely in the near to medium term. There
could be negative pressure on the ratings and/or outlook should
operating performance or risk-based capital measures materially
deteriorate or if there is a view of a weakened financial position of
its parent post spin-off from Citigroup Inc.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Best’s Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
-
Rating Members of Insurance Groups
-
Understanding BCAR for U.S. and Canadian Life/Health Insurers
-
Risk Management and the Rating Process for Insurance Companies
-
Evaluating Non-Insurance Ultimate Parents
-
Understanding BCAR for Property/Casualty Insurers
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2014 by A.M. Best Company, Inc.ALL RIGHTS
RESERVED.
Contacts:
A.M. Best Company, Inc.
Joan Sullivan—L/H, 908-439-2200,
ext. 5144
Senior Financial Analyst
joan.sullivan@ambest.com
or
William
Pargeans—L/H, 908-439-2200, ext. 5359
Assistant Vice
President
william.pargeans@ambest.com
or
Robert
Valenta—P/C, 908-439-2200, ext. 5191
Senior Financial Analyst
robert.valenta@ambest.com
or
Gerard
Altonji—P/C, 908-439-2200, ext. 5626
Assistant Vice President
gerard.altonji@ambest.com
or
Christopher
Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim
Peavy, 908-439-2200, ext. 5644
Assistant Vice President,
Public Relations
james.peavy@ambest.com
Source: A.M. Best Company, Inc.
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