Best’s News & Research Service - June 07, 2007 03:13 PM (EDT)
A.M. Best Affirms Ratings of American United Life Insurance Company and Its Affiliates
OLDWICK, N.J. //BestWire// - A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a+” of American United Life Insurance Company (AUL) (Indianapolis, IN) and its affiliates, State Life Insurance Company (Indianapolis, IN) and Pioneer Mutual Life Insurance Company (North Dakota), comprising the OneAmerica Group (OneAmerica). Concurrently, A.M. Best has affirmed AUL’s debt rating of “a-” on $75 million 7.75% of surplus notes. Additionally, A.M. Best has affirmed the ICR of “bbb+” of OneAmerica Financial Partners, Inc. (Indianapolis, IN), an intermediate holding company and its debt rating of “bbb+” on $200 million 7.00% senior unsecured notes. The outlook for all ratings is stable.
These ratings reflect OneAmerica’s strong capital position, established niche position in its core retirement services line, well defined risk management practices and diversified sources of earnings and revenue. The ratings also reflect OneAmerica’s ability to expand its business profile by strategically deploying capital to acquire additional businesses and distribution channels. Partially offsetting these positive rating factors are the erosion of earnings in its group product segment, competitive pressures in its core markets and the level of mortgages in its investment portfolio.
The organization’s debt-to-total capital at roughly 19% and its interest coverage ratio of approximately seven times are within A.M. Best’s expectations for the current ratings.
The FSR of A (Excellent) and ICRs of “a+’ have been affirmed for the following members of OneAmerica Group:
- American United Life Insurance Company
- State Life Insurance Company
- Pioneer Mutual Life Insurance Company
The following debt ratings have been affirmed:
American United Life Insurance Company-
- “a-” on $75 million 7.75% surplus notes, due 2026
OneAmerica Financial Partners Inc.-
- “bbb+” on $200 million 7.00% senior unsecured notes, due 2033