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Best’s News & Research Service - August 24, 2016 03:45 PM (EDT)

A.M. Best Withdraws Ratings of Beneficial Life Insurance Company

  • August 24, 2016 03:45 PM (EDT)

Oldwick //BestWire// - A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Beneficial Life Insurance Company (Beneficial Life) (Salt Lake City, UT). The outlook for each rating is stable. Concurrently, A.M. Best has withdrawn the ratings in response to the company’s request to no longer participate in A.M. Best’s interactive rating process.

The ratings of Beneficial Life reflect its positive operating earnings, adequate risk-based capitalization and historical support from its parent company, Deseret Management Corporation (DMC). Offsetting rating factors include significant exposure to below investment grade bonds, modest net income, lower levels of risk-adjusted capitalization and a limited business profile.

The company has been in runoff for several years and its business profile and operating profile are limited to servicing its retained policyholders. A.M. Best expects Beneficial Life to be profitable despite a sizeable dividend to DMC, as the liability profile of the remaining reserves continue to be low risk, based on A.M. Best’s product risk continuum; however, A.M. Best anticipates profitability to continue to trend lower going forward.

With the recent dividend payback to its parent, Beneficial Life’s risk-adjusted capitalization is substantially lower; however, it remains adequate for the company’s limited business profile. Additionally, its investment portfolio post-dividend has increased risk due to a higher allocation of below investment grade bonds to capital and a lower overall liquidity profile.

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 see A.M. Best’s Recent Rating Activity web page.

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

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