Press Release - JULY 27, 2017

A.M. Best Revises Issuer Credit Rating Outlook to Positive for The Union Labor Life Insurance Company


CONTACTS:
 Kate Steffanelli
Senior Financial Analyst
+1 908 439 2200, ext. 5063
kate.steffanelli@ambest.com

Michael Adams
Senior Financial Analyst
+1 908 439 2200, ext. 5133
michael.adams@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 - JULY 27, 2017
A.M. Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb” of The Union Labor Life Insurance Company (ULL). The outlook of the FSR remains stable.

ULL is a subsidiary of Ullico Inc., a holding company that offers insurance and financial products and services with its common stock held by various labor organizations and their related benefit funds. Both companies are headquartered in the District of Columbia.

The revised Long-Term ICR outlook reflects ULL’s balance sheet strength that is supported by very good risk-adjusted capitalization, as well as its lower risk investment allocation and adequate level of liquidity. Additionally, ULL has reported a more consistent trend of profitability over the past few years, primarily driven by its core stop-loss line of business and supplemented by its life and accidental death & dismemberment coverages. The organization also benefits from its separate accounts business, which continues to report growth in assets under management, favorable returns and outperforms relative to benchmarks. A.M. Best notes that ULL has an established position as a provider of insurance and investment products to the labor market.

While ULL’s results have trended favorably in recent periods, the company in the past has experienced some volatility within its stop loss business. ULL has partnered with several highly rated reinsurers to reduce its exposure to risk in this and other products, which has resulted in a moderate increase in reinsurance leverage. Due to the company’s more conservative investment philosophy, the lower interest rate environment has resulted in a less favorable trend in investment returns. Management continues to focus on improving expense ratios and driving revenue growth through underwriting and pricing improvements across all product lines. A.M. Best believes the company could be challenged to report a sustainable level of profitable stop-loss premium growth going forward due to the highly competitive market for that product.

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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AMB# Company Name
051057 Ullico Inc.
007152 Union Labor Life Insurance Company