Best’s News & Research Service - August 02, 2018 11:33 AM (EDT)
A.M. Best Affirms Credit Ratings of Sammons Financial Group, Inc. and Its Subsidiaries
- August 02, 2018 11:33 AM (EDT)
Oldwick //BestWire// - A.M. Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” of Midland National Life Insurance Company (Midland National) and North American Company for Life and Health Insurance (North American) (both domiciled in West Des Moines, IA). In addition, A.M. Best has affirmed the Long-Term ICR of “a-” and the Long-Term Issue Credit Rating (Long-Term IR) of “a-” on the $200 million 7.0% senior unsecured notes, due 2043 and the $500 million 4.45% senior unsecured notes, due 2027, of Sammons Financial Group, Inc. (SFG, Inc.) (Delaware). The outlook of these Credit Ratings (ratings) is stable. SFG, Inc. is an intermediate holding company for Midland National and North American, and is indirectly owned by Sammons Enterprises, Inc. Midland National and North American – the group’s key life/health insurance subsidiaries – are jointly referred to as the Sammons Financial Group (SFG).
The ratings reflect SFG’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management. The ratings also factor in SFG’s solid risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), to support its insurance and business risks. The group’s trend of positive earnings and well-managed investment portfolio benefits from the resources and expertise of its investment manager, Guggenheim Partners Investment Management, which focuses on prudent credit underwriting expertise as a means to diversify the company’s asset portfolio for yield. As a result, the group has a high allocation to structured assets such as asset-backed securities, collateralized loan obligations, mortgage loans and private placements, which historically have performed well but are subject to potential higher impairments under stressed economic scenarios. SFG, Inc.’s financial and operating leverage is considered well-within an acceptable range at the current ratings level.
SFG holds prominent market positions in the individual life and fixed indexed annuity marketplaces, with plans to grow its business in Sammons Retirement Solutions marketing products such as mutual fund IRAs and variable annuities through wholesale distribution through independent broker/dealers.
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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