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Best’s News & Research Service - May 19, 2023 01:03 PM (EDT)

AM Best Upgrades Credit Ratings of United Home Life Insurance Company; Affirms Ratings of United Farm Family Life Insurance Co.

  • May 19, 2023 01:03 PM (EDT)
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Oldwick //BestWire// - AM Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” (Excellent) from “a-” (Excellent) of United Home Life Insurance Company. At the same time, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of United Farm Family Life Insurance Company. The outlook of these Credit Ratings (ratings) is stable. Both companies comprise Indiana Farm Bureau Group, and are domiciled in Indianapolis, IN.

The ratings reflect Indiana Farm Bureau Group’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The rating upgrades of United Home Life Insurance Company are reflective of the continued importance of the company to the overall organization. United Home Life Insurance Company has had admitted asset growth of over 140% and surplus growth of 74% since 2018. With this growth, the company has become a more significant factor in the ratings of the overall life/annuity strategy of the organization. Consequently, United Home Life Insurance company has been grouped to the main life insurance rating unit member, United Farm Family Life Insurance Company, and with that, the FSR and Long-Term ICR for United Home Life Insurance has been upgraded.

The group’s balance sheet strength is supported by risk-adjusted capitalization assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), a consistent trend of capital growth, favorable liquidity metrics and high quality asset portfolio. The strongest balance sheet assessment is bolstered by favorable trends in operating performance. Despite heightened mortality trends stemming from the COVID-19 pandemic, the group’s underwriter performance improved in 2022. In addition, consistent investment income has led to net profitability despite these challenges. Although recent premium trends have remained level, the group has shifted its focus to writing ordinary life products that AM Best deems to be highly creditworthy.

The creditworthiness of the product mix contributes to the group’s neutral business profile assessment. This is also supported by its robust distribution network and strong cross-selling rate with the overall organization’s property/casualty agency distribution. Offsetting these factors is the group’s considerable amount of geographic concentration. Although the group is working to expand its geographic footprint beyond Indiana, the proportion of premium written outside the state currently is very modest. The group’s enterprise risk management program benefits from the framework and management expertise of the overall organization.

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.

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