AM Best

A.M. Best Upgrades Ratings of Oxford Life Insurance Company and Christian Fidelity Life Insurance Company


Marisa Bernardes
Financial Analyst
(908) 439-2200, ext. 5802

Raj Shah
Assistant Vice President
(908) 439-2200, ext. 5409

Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644


OLDWICK - MAY 06, 2014 03:03 PM (EDT)
A.M. Best has upgraded the financial strength rating (FSR) to A- (Excellent) from B++ (Good) and issuer credit ratings (ICR) to "a-" from "bbb+" of Oxford Life Insurance Company (Oxford Life) (Phoenix, AZ) and its subsidiary, Christian Fidelity Life Insurance Company (Christian Fidelity) (Dallas, TX). The outlook for all ratings has been revised to stable from positive. These companies are owned by their ultimate parent, AMERCO (Reno, NV) [NASDAQ: UHAL], which also is the parent of U-Haul International, Inc., North America's leading "do-it-yourself" household moving and storage operator.

A.M. Best also affirmed the FSR of B++ (Good) and the ICR of "bbb" of North American Insurance Company (Madison, WI), a small subsidiary of Oxford Life with a focus on the Medicare supplement business. The outlook for both ratings is stable.

The rating upgrades for Oxford Life and Christian Fidelity reflect their focused business strategies of serving senior markets, positive consolidated operating results within their diversified lines of business as well as their continued strong risk-adjusted capitalization. Over the past few years, the group has concentrated on revenue and earnings diversification by providing products to the senior market, both organically and through reinsurance activities. Going forward, A.M. Best notes that Oxford Life and Christian Fidelity expect to generate new business premiums organically with controlled growth from fixed annuities. A.M. Best also notes that the companies' statutory and GAAP earnings results remain positive, barring the statutory impact of previous years' reinsurance-related acquisition costs.

Partially offsetting these positive rating factors are the risks associated with Oxford Life's senior market and its underlying product offerings such as final expense and Medicare supplement businesses, where it may be challenged to sustain earnings momentum as intense competition could place pressure on organic new business premium growth while regulatory hurdles for its market niche remain at the forefront. In addition, with increased exposure to fixed annuities, A.M. Best believes that Oxford Life may encounter spread compression and lower statutory earnings due to a persistently low interest rate environment. However, A.M. Best notes that the group has reported consistent profitability from its Medicare supplement business as a result of good loss ratios and price increases.

Positive ratings movement is unlikely at present and/or the near term as all key financial metrics are reflected in the group's current ratings. Rating drivers that may lead to negative rating actions include significant earnings volatility, increased product concentration risks (such as elevated annuity sales or high reliance on the Medicare supplement business) as well as any material deterioration in AMERCO's balance sheet and operating results.

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

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