MAY 05, 2022 12:12 PM (EDT)
AM Best Upgrades Credit Ratings of New Era Life Insurance Company and Its Subsidiaries
Senior Financial Analyst
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FOR IMMEDIATE RELEASE
OLDWICK - MAY 05, 2022 12:12 PM (EDT)
AM Best has upgraded the Financial Strength Rating (FSR) to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a-” (Excellent) from “bbb+” (Good) of New Era Life Insurance Company and its wholly owned life insurance subsidiaries, New Era Life Insurance Company of the Midwest and Philadelphia American Life Insurance Company. AM Best has revised the outlooks of these Credit Ratings (ratings) to stable from positive. All companies are domiciled in Houston, TX, and collectively are known as New Era Group.
The ratings reflect New Era Group’s 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 upgrade reflects the strength of the group’s business profile with its diverse and low risk product offerings. New Era Group caters to three markets – fixed annuities, senior market with its Medicare supplement and the under age 65 segment with indemnity health. The group’s products are distributed by more than 6,000 captive agents. There is a component of concentration risk as New Era Group’s annuities are primarily sold in Texas. New Era Group’s consumer-focus has proven to be an effective strategy for the group.
New Era Group’s balance sheet strength is supported by its very strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The group’s capital and surplus continued to increase in 2021 to $152 million with the primary drivers being an increase in net income and unrealized gains.
The group has no financial or operating leverage, low reinsurance and no surplus notes. Offsetting the balance sheet strength is its relatively high concentration in highly secured mortgage loans concentrated in Texas, as well as a higher allocation to below investment grade bonds (primarily Class 3 and Class 4) secured by additional collateral. The group’s ERM remains appropriate for its risk profile.
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.