AM Best Information Services

JUNE 02, 2016 09:10 AM (EDT)

A.M. Best Affirms Ratings of Thrivent Financial for Lutherans and Thrivent Life Insurance Company

 Edward Kohlberg
Managing Senior Financial Analyst
+1 908 439 2200, ext. 5664

William Pargeans
Assistant Vice President
+1 908 439 2200, ext. 5359

Christopher Sharkey
Manager, Public Relations
+1 908 439-2200, ext. 5159

Jim Peavy
Assistant Vice President, Public Relations
+1 908 439-2200, ext. 5644


OLDWICK - JUNE 02, 2016 09:10 AM (EDT)
A.M. Best has affirmed the financial strength rating of A++ (Superior) and the issuer credit ratings of “aa+” of Thrivent Financial for Lutherans (Appleton, WI) and its subsidiary, Thrivent Life Insurance Company (Minneapolis, MN) (together known as Thrivent Financial). The outlook for each of these ratings is stable.

Thrivent Financial’s ratings reflect its prominent market presence within the Christian community, favorable trend of operating earnings, superior risk-adjusted capitalization and growth in life insurance in-force. Thrivent Financial maintains a high quality capital structure, which utilizes no debt and full retention of all product-related risks on its balance sheet.

The ratings also recognize efforts in expanding its membership base into the Christian community and the favorable persistency it enjoys as a result of its loyal membership base. Thrivent Financial maintains a diversified product portfolio that is intended to be complementary for its membership’s needs over their life cycle. As a result, it maintains some exposure to product lines with higher risk, including long term care and variable annuities, albeit variable annuity risk as measured by net amount at risk has been declining. Additionally, while there is some exposure to these riskier product liabilities, Thrivent Financial’s reserves are weighted towards ordinary life, which is viewed as a more creditworthy liability profile.

Offsetting rating factors include continued losses within its legacy long term care block and exposure to living benefit guarantees within variable annuities. Additionally, Thrivent Financial historically maintained an elevated commercial mortgage loan to capital ratio, although this is now more in line with industry averages. Finally, Thrivent Financial has a large percentage of reserves with interest sensitivity with a higher than average percentage of annuities lacking surrender charge protection. This exposes Thrivent Financial to spread compression given the continued low interest rate environment or disintermediation risk within its annuity block should interest rates rise significantly.

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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