Press Release - MAY 08, 2018

A.M. Best Affirms Credit Ratings of American Fidelity Assurance Co. and Upgrades Credit Ratings of American Public Life Ins. Co.


CONTACTS:
 Jeff Lane
Senior Financial Analyst
+1 908 439 2200, ext. 5567
jeffrey.lane@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 - MAY 08, 2018
A.M. Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa-” of American Fidelity Assurance Company (American Fidelity). Concurrently, A.M. Best has upgraded the FSR to A+ (Superior) from A (Excellent) and the Long-Term ICR to “aa-” from “a” of American Public Life Insurance Company (American Public). The companies are collectively referred to as American Fidelity Group and are subsidiaries of American Fidelity Corporation (AFC). All companies are domiciled in Oklahoma City, OK. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect American Fidelity Group’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management. American Fidelity Group has the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The continued favorable risk-adjusted capitalization level for its insurance and investment risks stems from consistent operating gains, despite sizable dividend payments to the parent organization. American Fidelity Group also has maintained revenue growth, continued operating profitability and a diverse business profile. The organization maintains an established national marketing niche, primarily among medium-sized employer groups offering voluntary worksite benefits.

However, while American Fidelity Group has good diversity of products, revenue and earnings, as well as a strong presence in its focus industry segments, the company will remain challenged by an overall highly competitive voluntary benefits market, which includes many national and regional insurers. Additionally, there is some exposure to higher risk assets, including commercial mortgage loans; however, the group has maintained a very successful loan portfolio for many years. Furthermore, the group has reported a growing exposure to some other higher risk assets and has an elevated level of geographic concentration in a small number of states.

The upgrade of American Public reflects its strategic role as an affiliated company member of American Fidelity Group, which is wholly owned by AFC. American Public has well-integrated operations and management, as well as the explicit and implicit operational and financial support of its parent.

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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