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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - OCTOBER 09, 2012 12:00 AM (EDT)
A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb+” of National Teachers Associates Life Insurance Company (NTA Life) (Addison, TX). NTA Life is a privately held company owned by Ellard Enterprises, Inc.
The revised outlook reflects NTA Life’s progress over the last few years in sizably growing premium revenue and earnings from its disability, hospital indemnity and life insurance products, as well as expanding sales beyond its core marketing regions. A.M. Best believes the company has demonstrated favorable trends in its overall premium revenue, earnings and risk-adjusted capital relative to its current rating level. Additionally, NTA Life has enhanced its balance sheet strength by reducing its exposure to return of premium business and improving investment management.
NTA Life markets limited benefit medical products, and to a lesser extent, disability, hospital indemnity and life insurance products chiefly to teachers, state government employees and emergency services personnel. Although its business is becoming more geographically diversified, over three-fifths of NTA Life’s premium revenue is concentrated in California, Texas, Virginia and the Carolinas. Moreover, consistent with the life/health industry in general, the company will be challenged to maintain healthy yields in the current low interest rate environment.
Positive rating actions may occur if NTA Life continues to meaningfully grow its non-limited benefit medical premium revenue and earnings, expand its premium revenue outside its core marketing regions and maintains favorable operating and financial trends. Conversely, negative rating actions may occur if trends in the company’s premium revenue and/or earnings begin to wane or if risk-adjusted capital significantly deteriorates.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.