Press Release - APRIL 11, 2019

AM Best Upgrades Issuer Credit Rating of Landmark Life Insurance Company


CONTACTS:
 Igor Bass
Financial Analyst
+1 908 439 2200, ext. 5109
igor.bass@ambest.com

Thomas Rosendale
Director
+1 908 439 2200, ext. 5201
thomas.rosendale@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 11, 2019
AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bb+” from “bb” and affirmed the Financial Strength Rating (FSR) of B (Fair) of Landmark Life Insurance Company (Landmark Life) (Brownwood, TX). The outlook of the Long-Term ICR has been revised to stable from positive while the FSR outlook remains stable.

The ratings reflect Landmark Life’s balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).

The Long-Term ICR upgrade reflects an overall improvement in AM Best’s assessment of the company’s ERM program. The new platform should allow Landmark to manage risk identification more effectively through additional evaluation of risk assessments, along with mitigation efforts, with further monitoring for all front line managers as well as high level executives.

AM Best expects Landmark Life’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), to remain at the strongest level over the medium term with recent improvements. AM Best also views Landmark Life as having adequate liquidity to meet any potential demands, but could sustain some surplus strain associated with its new ordinary life business as the company will be retaining more of its new business beginning in 2019. A partially offsetting balance sheet factor is the company’s lack of financial flexibility, which is limited given its relatively small size and the current resources of its ownership.

Overall earnings have been marginal, with heavier reliance of late on third-party administration (TPA) fee income, as direct ordinary life premium growth has been lacking over the past several years. Life earnings are projected to be lower in the near term as a result of additional retention reaching 90%, along with significant expansion initiatives in staffing and infrastructure; AM Best expects Landmark to maintain moderate profitability during this time period. Landmark’s business profile is considered fairly limited due to its predominantly narrow concentration in the ordinary life final expense sector, which is considered creditworthy, according to AM Best, with the majority of business from a single agency. A positive offsetting factor is that the TPA business provides a good supplement to earnings, but also is heavily weighted toward a single client. Additional expansion activity is under way to diversify the business, and should continue on its path of sustainable growth by leveraging a more diverse mix of ordinary life and TPA operations.

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.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.


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AMB# Company Name
068055 Landmark Life Insurance Company