AM Best Revises Outlooks to Positive for EquiTrust Life Insurance Company
03 Julio 2024 - 9:23AM
Business Wire
AM Best has revised the outlooks to positive from stable
and affirmed the Financial Strength Rating of B++ (Good) and the
Long-Term Issuer Credit Rating of “bbb+” (Good) of EquiTrust Life
Insurance Company (EquiTrust) (headquartered in Chicago, IL).
The Credit Ratings (ratings) reflect EquiTrust’s balance sheet
strength, which AM Best assesses as adequate, as well as its strong
operating performance, neutral business profile and appropriate
enterprise risk management.
The positive outlooks reflect EquiTrust’s trend of increasing
levels of risk-adjusted capitalization, as measured by Best’s
Capital Adequacy Ratio (BCAR). The company’s risk-adjusted
capitalization levels have increased over the past few years due to
capital contributions from its parent, a lack of stockholder
dividends and favorable operating results. EquiTrust also maintains
a strong liquidity profile with strong and steady operating cash
flows, very good surrender protection on in-force annuity business
and additional borrowing capacity through the Federal Home Loan
Bank. Overall premiums have increased in recent periods.
Additionally, the organization continues to add new distribution
relationships, which have led to additional sales. These factors
are expected to drive growth over the near to intermediate
term.
EquiTrust’s reinsurance leverage has declined significantly over
the past several years, though the company does utilize unrated
carriers for some of its reinsurance needs. Interest spreads have
remained favorable while crediting rates also have increased with
the earned rates.
Partially offsetting these positive factors is the lack of
audited financial statements from its parent. AM Best notes that
the company maintains some concentration in structured securities,
which currently comprise just under one-quarter of the general
account investment portfolio. Partially mitigating this concern in
AM Best’s view is that EquiTrust manages the investment portfolio
well with good diversity by sector and a low level of
impairments.
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 Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Louis Silvers Senior Financial Analyst +1 908
882 2316 louis.silvers@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Edward Kohlberg Director +1 908 882 1979
edward.kohlberg@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com