Best’s News & Research Service - October 21, 2022 02:51 PM (EDT)
AM Best Upgrades Credit Ratings for Guaranty Income Life Ins Co; Affirms Ratings of United Life Ins Co & Lincoln Benefit Life Co
- October 21, 2022 02:51 PM (EDT)
Oldwick //BestWire// - AM Best has upgraded the Financial Strength Rating (FSR) to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” (Excellent) from “bbb+” (Good) of Guaranty Income Life Insurance Company (GILIC) (headquartered in Baton Rouge, LA). In addition, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of United Life Insurance Company (ULIC) (Cedar Rapids, IA). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Lincoln Benefit Life Company (LBL) (headquartered in Rosemont, IL). The outlook of these ratings is negative.
The ratings of GILIC reflect its balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The ratings of ULIC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.
The ratings of LBL reflect its balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.
GILIC’s rating upgrades reflect the increased synergies with sister company, ULIC, including common management and business strategies as the retail insurance operations for Kuvare US Holdings, Inc. (Kuvare).
This includes recent initiatives currently in motion to realign the organization to remove the institutional markets business out from under the retail business. Also noted are the company’s strong operating improvements over the past several years, including premium growth in its key annuity products, significant distribution expansion and stable operating profile with favorable operating returns.
Offsetting rating factors include the impact of new business strain on operating results and capital. Additionally, GILIC’s reserve book is weighted heavily in interest-sensitive reserves with a concentrated product profile. In AM Best’s view, GILIC’s risk-adjusted capitalization is diminished qualitatively due to a high percentage of surplus notes, and increased leverage at Kuvare, which is expected to be managed down in the short to medium term. Kuvare continues to seek ways to increase financial flexibility for implicit and explicit support of the retail and institutional businesses.
The negative outlooks for LBL reflect the continued capital support needs at the company when viewed together with its captive reinsurer, Lancaster Re Captive Insurance Company. This is due to deterioration in the company’s capital trends as a result of underperformance in its runoff universal life with secondary guaranty business beyond initial projections. Mitigating factors include the strategic vision for the company, with a plan that includes supporting the liabilities and a suspension of dividends from the organization to improve its capital position.
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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.