AM Best

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


Steve Vincent
Senior Financial Analyst
+1 908 439 2200, ext. 5802

Rosemarie Mirabella
+1 908 439 2200, ext. 5892

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


OLDWICK - JUNE 29, 2017 10:36 AM (EDT)
A.M. Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long Term ICR) of “a-” of Oxford Life Insurance Company (Oxford Life) (Phoenix, AZ) and its subsidiary, Christian Fidelity Life Insurance Company (Christian Fidelity) (Dallas, TX), collectively referred to as Oxford Group. A.M. Best also has affirmed the FSR of B++ (Good) and the Long-Term ICR of “bbb” of North American Insurance Company (Madison, WI). The outlook of these Credit Ratings (rating) is stable. These companies are owned by the ultimate parent, AMERCO [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 rating affirmations reflect Oxford’s focused business strategy serving senior markets and continued strong risk-adjusted capitalization. In previous years, the group transitioned its strategy from reinsurance assumption to a direct writer of life, annuity and Medicare Supplement products to the senior market. Organic growth has been driven by the sales of Medicare supplement and final expense insurance products, 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 remained favorable and Oxford retains all earnings to support future business growth.

Partially offsetting these positive rating factors are the competitive challenges Oxford faces to grow its revenue base, particularly within ordinary life. The fixed annuities and the Medicare supplement line are the group’s core contributors to profitability. Oxford’s operating earnings remain highly correlated to future rate adjustments on its inforce Medicare Supplement block. Increased final expense and fixed annuity business could reduce the group’s statutory results because of new business strain. In addition, with a high level of exposure to fixed annuities, A.M. Best believes that Oxford Life may encounter spread compression because of the ongoing low interest rate environment.

Key rating factors that could result in a positive rating action include profitable growth across all core lines. Key rating factors that could result in a negative rating action include increased product concentration risks, higher growth in less creditworthy product lines, a material decline in risk-adjusted capitalization or a lack of profitable growth in ordinary life.

This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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