JUNE 23, 2022 12:00 PM (EDT)
AM Best Affirms Credit Ratings of American Family Mutual Insurance Co, S.I., Its Affiliates and American Family Life Ins Co
|Joni Cerbone, CPA|
Senior Financial Analyst
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Manager, Public Relations
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Managing Director, Strategy & Communications
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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 23, 2022 12:00 PM (EDT)
AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a+” (Excellent) of American Family Mutual Insurance Company, S.I. (American Family) (Madison, WI) and its affiliates. In addition, AM Best has upgraded the Long-Term Issue Credit Rating to “a-” (Excellent) from “bbb+” (Good) on the $70 million, 7.25%, 20-year surplus notes of NGM Insurance Company (Jacksonville, FL), an American Family affiliate. Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of American Family Life Insurance Company (AFLIC) (Madison, WI). The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings.)
The ratings of American Family reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).
American Family’s balance sheet assessment is derived from its risk-based capitalization also being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as historically consistent surplus growth and favorable reserving. Operating performance has been driven by consistent net investment income and realized capital gains, partially offset by underwriting losses. Underwriting results continue to be impacted by significant catastrophe losses due to historical weather events in recent years. Combined ratios are being pressured by rising costs, largely driven by COVID-19-related inflationary effects. Construction material and labor costs continue to increase as well.
The ratings of AFLIC reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM. The ratings also reflect support the company receives from its parent, American Family.
AFLIC’s risk-adjusted capitalization remains at the strongest level, as measured by BCAR, even with $870 million in dividends to American Family in recent years. AFLIC has shown consistent profitability on operating and net income levels.
The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with stable outlooks for the following affiliates of American Family Mutual Insurance Company, S.I.:
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.