AM Best


A.M. Best Revises Outlook to Stable for Ratings of American Fidelity Assurance Company & American Public Life Insurance Company


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Analyst(s)

Jeffrey Lane

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jeffrey.lane@ambest.com



Carl Austin

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carl.austin@ambest.com

Public Relations

Rachelle Morrow

(908) 439-2200, ext. 5378

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Jim Peavy

(908) 439-2200, ext. 5644

james.peavy@ambest.com


FOR IMMEDIATE RELEASE

OLDWICK, N.J. - MARCH 05, 2010 11:00 AM (EST)
A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit rating (ICR) of "aa-" of American Fidelity Assurance Company (American Fidelity). A.M. Best also has revised the outlook to stable from negative and affirmed the FSR of A- (Excellent) and ICR of "a-" of American Public Life Insurance Company (American Public). Both companies are subsidiaries of American Fidelity Corporation (AFC). All companies are domiciled in Oklahoma City, OK.

American Fidelity's revised outlook reflects its favorable operating results and improved risk-adjusted capital position. Additionally, the company has made considerable progress in lowering its expense ratio in recent years, which has been relatively high historically. The rating affirmations also reflect the company's well established niche in the voluntary education market. American Public's revised outlook recognizes its return to profitability and improved capitalization position.

A.M. Best remains somewhat concerned with the organization's sizeable exposure to real estate-related investments. However, American Fidelity's commercial mortgage loan portfolio has continued to perform well despite the weak U.S. economy. Additionally, an affiliated offshore insurance company tied to American Fidelity's international life insurance business incurred a large loss in 2009. In response to this, American Fidelity has taken steps to improve operating results in this segment, going forward.

For 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 that 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.

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