A.M Best Affirms Ratings of American National Insurance Company and Certain Subsidiaries
September 8, 2015 by Best's News Service
Oldwick – A.M. Best has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit rating (ICR) of “a+” of American National Insurance Company (ANICO) [NASDAQ:ANAT], as well as ANICO’s subsidiary, American National Life Insurance Company of New York (ANICONY) (Glenmont, NY). The ratings of ANICO have been extended to ANICONY based on its strategic role as the New York marketing arm of its ultimate parent. A.M. Best also has affirmed the FSR of A (Excellent) and the ICRs of “a” of the following life insurance subsidiaries of ANICO: Garden State Life Insurance Company (League City, TX), Standard Life and Accident Insurance Company and Farm Family Life Insurance Company (Glenmont, NY). In addition, A.M. Best has downgraded the FSR to A- (Excellent) from A (Excellent) and the (ICR) to “a-” from “a” of American National Life Insurance Company of Texas (ANTEX). The outlook for all ratings is stable. All the above companies are headquartered in Galveston, TX, unless otherwise specified.
The rating affirmations for ANICO are based on its strong level of consolidated risk-adjusted capitalization, growth in statutory capital and surplus, continued profitable earnings and diverse product offerings. ANICO benefits from revenue and income from diverse sources, which include its life/health and property/casualty affiliates. A.M. Best also notes that the financial leverage at ANICO remains low relative to its consolidated equity level.
Partially offsetting these positive rating factors are ANICO’s high exposure to interest-sensitive liabilities, the size of the annuity block relative to the life insurance block, variability in GAAP and statutory earnings in the past, as well as the challenges of optimizing its returns on a sustained basis.
The ratings of the affirmed life insurance subsidiaries of ANICO acknowledge their strong risk-adjusted capitalization and continuing contribution to ANICO’s consolidated results. Partially offsetting these positive rating factors are the life subsidiaries’ somewhat fluctuating premiums and earnings trends, more limited business profiles and the challenges to grow their business lines.
The changes in the FSR and ICR of ANTEX reflect the lack of longer term positive operating trend and A.M. Best’s view of the contribution to the enterprise.
In addition, A.M. Best has affirmed the FSRs of A (Excellent) and the ICRs of “a” of American National Property and Casualty Company (ANPAC) (Springfield, MO), its subsidiary, American National General Insurance Company (Springfield, MO) and its affiliate, American National County Mutual Insurance Company (Galveston, TX), as well as its separately rated subsidiaries, American National Lloyds Insurance Company (Galveston, TX) and Pacific Property & Casualty Company (San Jose, CA). At the same time, A.M. Best has affirmed the FSR of A- (Excellent) and the ICR of “a-” of ANPAC’s separately rated subsidiary, ANPAC Louisiana Insurance Company(Mandeville, LA). Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and the ICRs of “a” of Farm Family Casualty Insurance Company (Farm Family) and United Farm Family Insurance Company (both domiciled in Glenmont, NY). The outlook for these ratings is stable. These companies are all property/casualty subsidiaries of their ultimate parent, ANICO.
The ratings reflect strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio, continued improvement in operating results and extensive market knowledge as a national writer. The ratings also reflect the support provided by the ultimate parent, ANICO, as well as the synergies generated amongst and between the groups and their parent. Partially offsetting these factors are the competitive market conditions, volatile investment conditions and potential for significant catastrophic losses, however, mitigated by comprehensive reinsurance, which could have an impact on capitalization.
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 visit A.M. Best’s Ratings & Criteria Center.
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