A.M. Best Affirms Ratings of Kansas City Life Insurance Company and Its Subsidiaries
04 Junio 2010 - 2:09PM
Business Wire
A.M. Best Co. has affirmed the financial strength rating
(FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of
Kansas City Life Insurance Company (Kansas City Life)
[NASDAQ: KCLI] and its subsidiary, Sunset Life Insurance Company
of America. The outlook for these ratings is stable.
Additionally, A.M. Best has revised the outlook to positive from
stable and affirmed the FSR of B++ (Good) and ICR of “bbb+” of
Old American Insurance Company (Old American), the group’s
final expense life insurance subsidiary. All companies are
domiciled in Kansas City, MO.
The ratings primarily reflect Kansas City Life’s solid
risk-adjusted capitalization, conservative balance sheet and
consistently profitable statutory operating results. In addition,
the company maintains a diversified product portfolio that consists
of ordinary life insurance, fixed and variable annuities and group
accident and health and life insurance products. A.M. Best notes
that the decline in ordinary life premiums experienced in recent
periods, which was partially due to the recessionary economic
environment, has been offset by a noticeable increase in fixed
annuity sales. However, A.M. Best expects overall sales to decline
over the near term as market conditions for fixed annuities cause
sales to moderate. Furthermore, A.M. Best believes Kansas City Life
will be challenged to increase sales of its ordinary life and group
insurance products due to competitive market conditions and the
economic environment. A.M. Best notes that overall premium trends
also are impacted somewhat by previously acquired closed blocks of
ordinary life insurance.
The positive outlook on Old American’s ratings recognizes the
favorable trend in new business sales it has experienced in recent
periods, the sufficient levels of risk-adjusted capital and the
favorable growth opportunities due to the significant size and
expansion of the senior market. While net written premiums had
declined in prior years, Old American recorded positive premium
growth over the most recent period due to increasing sales of its
final expense whole life insurance product, which is attributable
to concerted marketing efforts in this segment. A.M. Best also
notes that Old American has maintained positive statutory operating
gains despite the strain from new sales. A.M. Best will continue to
monitor the premium growth rate and mortality experience for this
line of business as these will be determining factors of Old
American’s future profitability.
For Best’s Credit Ratings, an overview of the rating process and
rating methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings,
including any additional methodologies and factors that may have
been considered, can be found at
www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service
credit rating organization dedicated to serving the financial and
health care service industries, including insurance companies,
banks, hospitals and health care system providers. For more
information, visit www.ambest.com.
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