AM Best Affirms Credit Ratings of American National Insurance Company & Life/Health Subsidiaries; Upgrades Issuer Credit Rati...
14 November 2019 - 6:26AM
Business Wire
AM Best has affirmed the Financial Strength Rating (FSR)
of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term
ICR) of “a+” of American National Insurance Company (ANICO)
[NASDAQ: ANAT], American National Life Insurance Company of Texas
(ANTEX), American National Life Insurance Company of New York
(ANICONY) (Glenmont, NY) and Standard Life and Accident Insurance
Company (SLAICO). These companies are referred to collectively as
the American National Group (ANG). Concurrently, AM Best affirmed
the FSR of A (Excellent) and Long-Term ICR of “a” for Garden State
Life Insurance Company (GSL). The outlook of these Credit Ratings
(ratings) is stable. All the above companies are headquartered in
Galveston, TX unless otherwise noted.
The ratings reflect ANG’s balance sheet strength, which AM Best
categorizes as strongest, as well as its adequate operating
performance, favorable business profile and appropriate enterprise
risk management (ERM).
The ratings reflect ANG’s high level of absolute and
risk-adjusted capitalization, which supports the group’s insurance
and business risks. In addition, AM Best considers the quality of
capital as good, with organic earnings growth, no financial
leverage, an overall good credit quality of invested assets and low
use of reinsurance. ANG has strong liquidity capability and good
liquidity management, which is supported by strong liquidity
metrics. The favorable business profile allows the group to offer a
diverse array of life, annuity and accident & health products
to various markets using multiple distribution platforms, which
also results in good diversification of earnings. While not a
market leader, ANG does hold prominent positions in its focused
markets. The group’s ERM program focuses on the evaluation of risks
and its impact on the capital structure.
ANG’s statutory earnings have somewhat declined over the past
several years, mainly due to new business strain and spread
compression on its interest-sensitive blocks of business caused by
persistently low interest rates. Approximately 70 percent of
general account liabilities are annuity liabilities, which exposes
the group to spread compression if interest rates remain low.
However, disintermediation risk is somewhat muted due to strong
management of crediting rates on its annuity blocks of
business.
In addition, AM Best has upgraded the Long-Term ICRs to “a+”
from “a” and affirmed the FSR of A (Excellent) of American National
Property and Casualty Company (Springfield, MO), and its
subsidiaries, American National General Insurance Company
(Springfield, MO); ANPAC Louisiana Insurance Company (Baton Rouge,
LA); American National Lloyds Insurance Company (Galveston, TX);
Pacific Property and Casualty Company (San Jose, CA) and its
affiliates, American National County Mutual Insurance Company
(Galveston, TX), Farm Family Casualty Insurance Company and United
Farm Family Insurance Company (both domiciled in Glenmont, NY).
These entities are all considered part of American National
Property & Casualty Group (ANPAC Group) due to their strategic
importance. The outlook of these ratings is stable. These companies
are property/casualty subsidiaries of their ultimate parent,
ANICO.
The ratings reflect ANPAC Group’s balance sheet strength, which
AM Best categorizes as strongest, as well as its adequate operating
performance, neutral business profile and appropriate ERM.
Furthermore, the ratings reflect ANPAC Group’s consistent
operating earnings and extensive market knowledge as a national
writer. The ratings also reflect the continued support provided by
the ultimate parent, ANICO, and the synergies generated amongst
these companies and their parent. Partially offsetting these rating
factors are the competitive market conditions and the potential
impact on capitalization from significant catastrophe losses, which
is mitigated by comprehensive reinsurance protection.
This press release relates to Credit Ratings that have been
published on AM 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 AM 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 AM Best press releases, please view Guide
for Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global credit rating agency, news publisher and
data provider specializing in the insurance industry. The company
does business in more than 100 countries. Headquartered in Oldwick,
NJ, AM Best has offices in cities around the world, including
London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For
more information, visit www.ambest.com.
Copyright © 2019 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20191113005814/en/
Frank Walko CPA Financial Analyst – L/H +1 908
439 2200, ext. 5072 frank.walko@ambest.com Michael T.
Venezia Senior Financial Analyst – PC +1 908 439
2200, ext. 5034 michael.venezia@ambest.com Christopher
Sharkey Manager, Public Relations +1 908 439 2200,
ext. 5159 christopher.sharkey@ambest.com Jim Peavy
Director, Public Relations +1 908 439 2200, ext. 5644
james.peavy@ambest.com
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