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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MARCH 03, 2009 12:00 AM (EST)
A.M. Best Co. has withdrawn the issuer credit rating (ICR) of "a", the debt rating of "a" on senior floating rate notes and AMB-1 on the commercial paper program of Alfa Corporation (Alfa Corp), and an "nr" has been assigned to the ICR.
Concurrently, A.M. Best has affirmed the financial strength rating (FSR) of A+ (Superior) and ICRs of "aa-" of Alfa Insurance Group (Alfa) and its members. The outlook for these ratings is stable. All companies are domiciled in Montgomery, AL except for Alfa Alliance Insurance Corporation, which is in Glen Allen, VA. (See below for a detailed list of the companies and ratings.)
The withdrawal of Alfa Corp's ratings reflects its April 2008 privatization coupled with the fourth quarter 2008 repayment of its senior floating rate notes due 2017 and the replacement of its commercial paper program with a revolving bank line of credit.
The ratings of Alfa recognize its solid risk-adjusted capitalization, recently favorable operating performance trend and sustainable competitive advantage. These strengths are partly offset by unfavorable operating results within its property lines of business, competitive market conditions and the group's reduced, yet ongoing susceptibility to severe weather-related events due to its geographic concentration of risks in the Gulf region.
A.M. Best also has affirmed the FSR of A+ (Superior) and ICR of "aa-" of Alfa Life Insurance Corporation (Alfa Life). The outlook for both ratings has been revised to negative from stable. .
These ratings reflect Alfa Life's integral role in the recently privatized Alfa group of companies, sustained growth in new life business, positive but decreasing net operating gains before taxes and focus on enterprise risk management. Partially offsetting these strengths are Alfa Life's high exposure to mortgage-backed securities, the large impact of realized capital losses, narrow geographic profile and the challenges to grow its ordinary life production outside of Alabama.
The ICR of "a" has been withdrawn and assigned an "nr" for Alfa Corporation.
The following debt ratings have been withdrawn:
Alfa Corporation—
- "a" on $70 million senior floating rate notes, due 2017
- AMB-1 on commercial paper program
The FSR of A+ (Superior) and ICRs of "aa-" have been affirmed for Alfa Insurance Group and its following members:
- Alfa General Insurance Corporation
- Alfa Insurance Corporation
- Alfa Vision Insurance Corporation
- Alfa Mutual Insurance Company
- Alfa Mutual Fire Insurance Company
- Alfa Mutual General Insurance Company
- Alfa Specialty Insurance Corporation
- Alfa Alliance Insurance Corporation
For Best's Debt Ratings, all other Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit Best's Ratings & Analysis..
The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at Best's Credit Rating Methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.