Best’s News & Research Service - December 13, 2018 09:03 AM (EST)
AM Best Assigns Credit Ratings to American Life & Security Corp.
- December 13, 2018 09:03 AM (EST)
Oldwick //BestWire// - AM Best has assigned a Financial Strength of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb” to American Life & Security Corp. (American Life) (headquartered in Lincoln, NE). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect American Life’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The ratings are based on the strategic financial business plan shared with AM Best. Vespoint LLC acquired a controlling interest in American Life in June 2018. American Life has been repositioned to address a market need in the life and annuity space for a technology-enabled, administratively and operationally focused program carrier. This fee-based model focuses on providing services as a fronting insurer for third-party reinsurers and providing third-party administration.
American Life’s risk-adjusted capitalization, as measured by the Best’s Capital Adequacy Ratio (BCAR), is forecast to be at the strongest level over the near term driven by a recapitalization of $20.5 million by Vespoint LLC, partially through outside funding. The balance sheet assessment takes into account the level of conservative investment strategy, initial capitalization of the company and the type of reinsurance agreements in place with carriers. This includes a high use of reinsurance leverage in the business plan.
American Life’s overall operating performance results are considered adequate, as a result of the strategic financial business plan provided by the company over the near term. The company’s business profile is viewed as limited due to the start-up nature of operations, along with initial lack of product diversification and risk exposure within the first few years of operation.
The company’s ability to execute upon its business plan will be a key rating factor going forward. As a result, AM Best will closely monitor American Life to ensure that projected targeted results are attained as planned.
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.
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