Best’s News & Research Service - April 25, 2019 10:05 AM (EDT)
AM Best Revises Outlooks to Positive for NLV Financial Corporation and Its Insurance Subsidiaries
- April 25, 2019 10:05 AM (EDT)
Oldwick //BestWire// - AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” of National Life Insurance Company (NLIC) (Montpelier, VT) and its wholly owned subsidiary, Life Insurance Company of the Southwest (Addison, TX) (together known as National Life). Concurrently, AM Best has revised the outlook to positive from stable and affirmed the Long-Term Issue Credit Ratings (Long-Term IR) of “a-“ on the surplus notes of NLIC. Both companies are life insurance subsidiaries of NLV Financial Corporation (NLVF) (Montpelier, VT), which is the intermediate holding company in the organization’s mutual holding company structure. NLVF and its subsidiaries are collectively known as the National Life Group.
Lastly, AM Best has revised the outlooks to positive from stable and affirmed the Long-Term ICR of “bbb+” of NLVF. (See below for a detailed listing of the Long-Term IRs.)
The ratings reflect the National Life Group’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM). The group has a long history of solid execution in targeting life insurance and annuity product solutions to the middle market segment, which it markets through a combination of career agents and a growing independent agency force. The group has shown continuing trends of strong sales growth, outperforming the broader life insurance market. Profitable growth has led to an improved market position and increasing market share with its niche products, such as its offerings in the K-12 educators market and indexed universal life. The ERM assessment of appropriate is reflective of the group’s well-established governance structure, culture and risk management controls.
The revised outlooks to positive reflect a continued strengthening in the group’s balance sheet strength, including maintenance of strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and improvements in the risk profile of the group’s investment portfolio. The group’s balance sheet previously had been impacted by unfavorable factors, including the asset portfolio composition, which historically has had a higher risk profile.
The following Long-Term IRs have been affirmed with the outlook revised to positive from stable:
NLV Financial Corporation—
— “bbb+” on $75 million 6.50% senior unsecured notes, due 2035
— “bbb+” on $200 million 7.50% senior unsecured notes, due 2033
The following Long-Term IRs have been affirmed with the outlook revised to positive from stable:
National Life Insurance Company—
— “a-” on $200 million 10.50% surplus notes, due 2039
— “a-” on $350 million 5.25% surplus notes, due 2068
This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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