Best’s News & Research Service - December 15, 2016 02:57 PM (EST)
A.M. Best Revises Outlooks to Positive for Citizens Security Life Insurance Company
- December 15, 2016 02:57 PM (EST)
Oldwick //BestWire// - A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B+ (Good) and Long-Term Issuer Credit Rating of “bbb-” of Citizens Security Life Insurance Company (Citizens Security) (Louisville, KY).
The revised outlooks reflect Citizens Security’s continued positive operating results, diversified premium revenue growth and favorable risk-adjusted capital position over the past two years. During this period, the company’s core individual dental and vision segment contributed increasingly to earnings, supplemented by net income from the amortization of a ceding commission on reinsured individual life business. Additionally, acquisitions of several medical management companies earlier this year by its parent holding company, Citizens Financial Corporation, are expected to result in a major increase in new business and enhanced geographic diversity for Citizens Security over the next few years.
A.M. Best notes that financial leverage at the parent company has increased as a result of its recent acquisitions. As such, Citizens Security’s capital and surplus growth may be limited as an increase in future dividends is anticipated to service the debt. Additionally, Citizens Security continues to maintain an elevated level of higher risk assets, including equities, real estate and below investment grade bonds. However, the company significantly reduced its below investment grade bonds in 2015. A.M. Best notes the company maintains adequate risk-adjusted capital relative to its insurance and investment-related risks.
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.
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