AM Best

A.M. Best Affirms Ratings of Oxford Life Insurance Company and Subsidiaries


Steve Vincent
Senior Financial Analyst
(908) 439-2200, ext. 5802

Stephen Irwin
Vice President
(908) 439-2200, ext. 5454
Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159

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


OLDWICK - MAY 06, 2015 03:06 PM (EDT)
A.M. Best has affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit ratings (ICR) of "a-" of Oxford Life Insurance Company (Oxford Life) (Phoenix, AZ) and its subsidiary, Christian Fidelity Life Insurance Company (Christian Fidelity) (Dallas, TX). A.M. Best has also affirmed the FSR of B++ (Good) and the ICR of "bbb" of North American Insurance Company (Madison, WI). The outlook for all ratings is stable. These companies are owned by the 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 self-storage operator.

The affirmations reflect a focused business strategy serving senior markets, positive consolidated operating results, diversified lines of business and continued strong risk-adjusted capitalization. The group has concentrated on revenue and earnings diversification by providing products to the senior market, organically and through reinsurance activities. Organic growth has been driven by strong sales of Medicare supplement and final expense insurance, as well as opportunistic growth in fixed annuity products. Most recently, the continued stabilization of competitive rates and entry into new states has driven growth within the Medicare supplement line of business. A.M. Best also notes that the companies' statutory and GAAP earnings have improved through price increases in the Medicare supplement line of business and higher spreads on new annuity products, while retained earnings has led to strong risk-adjusted capitalization.

Partially offsetting these positive rating factors are intense competition within Oxford Life's senior market niche, regulatory challenges and persistent low interest rates. A.M. Best notes the challenges to sustain earnings momentum, as intense competition could place pressure on organic life premium growth, and regulatory hurdles for its Medicare supplement line remain a potential impediment. Although the Medicare supplement line remains the group's core contributor to profitability, its other lines of business, such as final expense and fixed annuities, could reduce the group's statutory results because of new business strain. In addition, with an increased exposure to fixed annuities, A.M. Best believes that Oxford Life may encounter spread compression because of the ongoing low interest rate environment.

Positive rating movement is unlikely in the near term as all key financial metrics are reflected in the current ratings. Rating drivers that may lead to negative rating actions include earnings volatility, increased product concentration risks (such as elevated annuity sales or high reliance on the Medicare supplement business) and 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

Key insurance criteria reports utilized:

  • A.M. Best's Liquidity Model for U.S. Life Insurers

  • Evaluating Non-Insurance Ultimate Parents

  • Rating Members of Insurance Groups

  • Risk Management and the Rating Process for Insurance Companies

  • Understanding BCAR for U.S. and Canadian Life/Health Insurers

This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best's Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.

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