CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - AUGUST 06, 2015 10:36 AM (EDT)
A.M. Best has revised the outlook to stable from positive and affirmed the financial strength rating of B++ (Good) and the issuer credit rating of "bbb+" of National Farm Life Insurance Company (NFLIC) (Fort Worth, TX).
The outlook revision to stable reflects a modest decline in operating earnings in the current year, flat first-year and single life insurance premiums and the potential for disintermediation risk in a rising interest rate environment.
The ratings recognize NFLIC's niche marketing strategy in reaching out to families in rural communities and the Hispanic market in Texas, a high quality investment portfolio and favorable levels of risk adjusted capitalization.
Partially mitigating rating factors include a narrow business profile that is concentrated in worksite marketing, with the vast majority of premiums generated from Texas. Additionally, NFLIC may be exposed to disintermediation risk under a rapidly rising interest rate environment and it has a large percentage of annuities with crediting rates at 4%, albeit with some flexibility to adjust crediting rates prospectively. While operating results are positive, they have declined modestly and the company's operating returns remain below peer benchmarks and industry averages.
This press release relates to rating(s) 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 visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.