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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - SEPTEMBER 15, 2006 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of "a+" of Fidelity and Guaranty Life Insurance Company (F&G Life) and its wholly owned subsidiary, Fidelity and Guaranty Life Insurance Company of New York (FGNY) These companies are the principal insurance subsidiaries of Old Mutual U.S. Life Holdings, Inc. (OMUSLH), which is an indirect, wholly owned subsidiary of Old Mutual plc. Old Mutual plc is an international financial services company based in London, England.
Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and the ICR of "a-" of Americom Life & Annuity Insurance Company (Americom), a strategic subsidiary of OMUSLH. All companies are headquartered in Baltimore, MD. The outlook for all ratings is stable.
F&G Life, FGNY and Americom comprise the U.S. life insurance and annuity operations of their ultimate parent, Old Mutual plc, and are marketed under the name, Old Mutual Financial Network (OMFN). The ratings reflect OMFN's continued strong sales and leading market positions in its niche businesses, especially fixed-indexed annuities, its established distribution relationships and sound asset/liability management capabilities. The companies also benefit from the financial strength and support of Old Mutual plc, which has historically provided the capital necessary to support business growth in the United States.
These strengths are offset by the group's continuing statutory operating losses and its operational concentration in the highly competitive individual annuity marketplace. A.M. Best notes that operating losses over the last several years have been largely caused by expense strain from robust annuity production. However, OMFN has made progress in expanding life sales, with a focus on marketing mortgage term and universal life through brokerage distribution.
Additionally, due to OMFN's sales being driven predominantly by individual annuities, the group has considerable exposure to interest-sensitive liabilities (95% of reserves). Due to its concentration in annuity liabilities, OMFN is exposed to substantial interest rate risk, especially spread compression at times of low interest rates. A.M. Best recognizes that the group's effective asset/liability management and hedging programs serve to substantially mitigate interest rate and equity market risk under a broad range of economic scenarios. A.M. Best notes that the life companies' assets are managed by Old Mutual Asset Management, the U.S. asset management group of Old Mutual plc.
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For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit Best's Life/Health Center.
A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source.