AM Best Information Services




MAY 11, 2016 08:58 AM (EDT)

A.M. Best Assigns Ratings to the Members of Prosperity Life Group


CONTACTS:
 Edward Kohlberg
Managing Senior Financial Analyst
+1 908 439 2200, ext. 5664
edward.kohlberg@ambest.com

Ken Johnson, CFA, CAIA, FRM
Vice President
+1 908 439 2200, ext. 5056
ken.johnson@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - MAY 11, 2016 08:58 AM (EDT)
A.M. Best has assigned a financial strength rating of A- (Excellent) and an issuer credit rating of “a-” to Shenandoah Life Insurance Company (Shenandoah Life) (Roanoke, VA), SBLI USA Life Insurance Company, Inc. (SBLI USA) (New York, NY) and S USA Life Insurance Company, Inc. (S USA) (Phoenix, AZ) (collectively referred to as Prosperity Life). The outlook assigned to each rating is stable.

Prosperity Life is a growing insurance organization focused on direct sales of life, supplemental insurance and annuity products through multiple distribution channels. The company is also expected to grow through continued mergers and acquisition or block transactions. Accordingly, A.M. Best views Prosperity Life’s business model positively as they focus on more credit-worthy lines of business. The company pursues a focused marketing strategy targeting middle market consumers with a broad portfolio of products including whole life, individual term, universal life, final expense, individual annuity and various individual supplemental insurance products. The ratings also reflect Prosperity Life’s strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as the group is well-capitalized due to positive operating gains and capital infusions from the parent company upon being acquired. Net income has also improved, as A.M. Best does not anticipate pre-acquisition realized losses to continue going forward.

Partially offsetting these positive rating factors are challenges in generating new organic business growth and the competitive block acquisition market. The company recently began writing new business, and it is expected that new business growth will increase. In addition, there are execution risks as the company has had recent rapid growth due to strategic acquisitions. Additional offsetting rating factors include the group’s elevated, although declining, exposure to structured securities within its fixed income portfolio and the challenges relating to the continued low interest rate environment.

This press release relates to rating(s) 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.

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