APRIL 25, 2018 03:01 PM (EDT)

A.M. Best Affirms Credit Ratings of American Enterprise’s Subsidiaries; Upgrades Credit Ratings of Great Western Insurance Co.


CONTACTS:
 Bridget Maehr
Associate Director
+1 908 439 2200, ext. 5321
bridget.maehr@ambest.com

Joseph Zazzera, MBA
Director
+1 908 439 2200, ext. 5797
joseph.zazzera@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

FOR IMMEDIATE RELEASE

OLDWICK - APRIL 25, 2018 03:01 PM (EDT)
A.M. Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” of American Republic Insurance Company, American Republic Corp Insurance Company, Medico Corp Life Insurance Company, Medico Insurance Company and Medico Life and Health Insurance Company, the insurance subsidiaries of American Enterprise Group, Inc. (American Enterprise) (all of which are domiciled in Des Moines, IA). Additionally, A.M. Best has upgraded the FSR to A- (Excellent) from B++ (Good) and the Long-Term ICR to “a-” from “bbb+” of Great Western Insurance Company (Great Western) (Ogden, UT). The outlook of these Credit Ratings (ratings) is stable.

The rating affirmations of the insurance subsidiaries of American Enterprise reflect the group’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

American Enterprise’s balance sheet assessment is driven predominantly by its high level of risk-adjusted capital. Additionally, its investment portfolio has low exposure to interest rate-sensitive reserves and is moderately conservative. However, exposure to mortgage loans has increased with the addition of the Great Western mortgage portfolio. American Enterprise historically has reported favorable operating trends with premium growth and continued profitability. Statutory losses for the consolidated group in 2017 were related to a one-time reserve charge reported by Great Western. Operating results are expected to be favorable going forward, with the acquisition of Great Western being accretive to operating results. American Enterprise operates mostly in its niche senior protection product market with an emphasis on Medicare supplemental business. The addition of Great Western’s pre-need and final expense products broadens the organization’s product portfolio. The group’s in force business remains concentrated in Medicare supplemental; however, due to competitive pressures new sales is being derived more from its dental and critical illness lines, along with the newly acquired pre-need and final expense lines. The group has well-established and diverse distribution channels. However, there is a lack of unified branding of its products. American Enterprise has a developed risk management process, and there is work being undertaken to increase the depth of its program.

The ratings of Great Western reflect its strategic role to American Enterprise as the core writer of pre-need and final expense products. All of Great Western’s business is ceded to its immediate parent, American Republic Insurance Company.

This press release relates to Credit Ratings 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. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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