Company Website:
http://www.ambest.com
OLDWICK, N.J. -- (Business Wire)
A.M. Best has affirmed the financial strength rating (FSR) of A-
(Excellent) and the issuer credit ratings (ICR) of “a-” of Oxford
Life Insurance Company (Oxford Life) (Phoenix, AZ) and its
subsidiary, Christian Fidelity Life Insurance Company (Christian
Fidelity) (Dallas, TX). A.M. Best has also affirmed the FSR of B++
(Good) and the ICR of “bbb” of North American Insurance Company
(Madison, WI). The outlook for each rating is stable. These companies
are owned by the ultimate parent, AMERCO (NASDAQ:UHAL), which
also is the parent of U-Haul International, Inc., North America's
leading “do-it-yourself” household moving and self-storage operator.
The rating affirmations reflect a focused business strategy serving
senior markets, positive consolidated operating results, diversified
lines of business and continued strong risk-adjusted capitalization. The
group has concentrated on revenue and earnings diversification by
providing products to the senior market, organically and through
reinsurance activities. Organic growth has been driven by strong sales
of Medicare supplement and final expense insurance, as well as
opportunistic growth in fixed-annuity products. Most recently, the
continued stabilization of competitive rates and entry into new states
has driven growth within the Medicare supplement business. A.M. Best
also notes that the companies’ statutory and GAAP earnings have improved
through price increases in the Medicare supplement business and higher
spreads on new annuity products, while retained earnings have led to
strong risk-adjusted capitalization.
Partially offsetting these positive rating factors are the intense
competition within Oxford Life’s senior market niche, regulatory
challenges, the level of interest-sensitive reserves and persistent low
interest rates. A.M. Best notes the challenges in sustaining earnings
momentum, as intense competition could place pressure on organic life
premium growth, and the regulatory hurdles for its Medicare supplement
line that remain a potential impediment. Although the Medicare
supplement line is still the group’s core contributor to profitability,
their other lines of business, such as final expense and fixed
annuities, could reduce the group’s statutory results because of new
business strain. In addition, with an increased exposure to fixed
annuities, A.M. Best believes that Oxford Life may encounter spread
compression because of the ongoing low interest rate environment.
Key factors that could result in a positive rating action include
significant and profitable growth within ordinary life insurance. Key
factors that could result in a negative rating action include a material
deterioration in AMERCO's balance sheet and operating results, increased
product concentration risks or higher growth in less creditworthy
products.
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 Activity web page.
A.M. Best is the world’s oldest and most authoritative insurance
rating and information source. For more information, visit www.ambest.com.
Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS
RESERVED.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160526006273/en/
Contacts:
A.M. Best
Steve Vincent, +1-908-439-2200, ext. 5802
Senior
Financial Analyst
steve.vincent@ambest.com
or
Rosemarie
Mirabella, +1-908-439-2200, ext. 5892
Assistant Vice
President
rosemarie.mirabella@ambest.com
or
Christopher
Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim
Peavy, +1-908-439-2200, ext. 5644
Assistant Vice President,
Public Relations
james.peavy@ambest.com
Source: A.M. Best
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