Best’s News & Research Service - November 21, 2018 09:07 AM (EST)
A.M. Best Removes from Under Review with Developing Implications and Affirms Credit Ratings of Grange Life Insurance Company
- November 21, 2018 09:07 AM (EST)
Oldwick //BestWire// - A.M. Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Grange Life Insurance Company (Columbus, OH). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Grange Life’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.
Grange Life maintains a very strong balance sheet assessment with the strongest level of risk-adjusted capital, along with an improving quality of capital as the company no longer uses a captive reinsurance company and does not use any surplus notes or other forms of debt that could make their balance sheet less conservative than those of its peers.
Offsetting the very strong balance sheet assessment is the marginal operating performance due to poor performing blocks of business, leading to volatile results. The business profile remains limited as the company’s ability to sell is limited to cross-selling opportunities with affiliated property/casualty agents from Grange Mutual Casualty Company. This is unlikely to change in the near to medium term with the acquisition of Grange Life by Kansas City Life Insurance Company (Kansas City Life); however, A.M. Best expects Kansas City Life to develop this distribution system further and potentially enhance Grange Life’s product offerings.
A.M. Best expects the successful acquisition of Grange Life by Kansas City Life to improve further the group’s liability profile, as the acquired reserve book of business is largely ordinary life policies, and the acquisition likely will be accretive to earnings in the future. Kansas City Life’s management team has a successful track record of acquiring companies and blocks of business that have proven beneficial for the group and A.M. Best expects the Kansas City Life’s management team to use their experience to gain synergies through the acquisition.
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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