A.M. Best Affirms Ratings & Revises Outlook to Negative for Key Life/Health Subsidiaries of Great American Financial Resource...
28 3월 2009 - 2:01AM
Business Wire
A.M. Best Co. has affirmed the financial strength ratings
(FSR) of A (Excellent) and A- (Excellent) and issuer credit ratings
(ICR) of �a� and �a-� of the key life/health insurance subsidiaries
of Great American Financial Resources, Inc. (GAFRI), which
is wholly owned by American Financial Group, Inc. (AFG)
(Cincinnati, OH) (NYSE: AFG). The outlook for the above ratings has
been revised to negative from stable.
Additionally, A.M. Best has affirmed the FSR of B++ (Good) and
ICRs of �bbb+� of Central Reserve Life Insurance Company
(Cleveland, OH), Continental General Insurance Company
(Omaha, NE) and Provident American Life and Health Insurance
Company (Cleveland, OH). All three companies are part of
GAFRI�s supplemental health insurance business and are subsidiaries
of Ceres Group, Inc. (Ceres), which was acquired by GAFRI in August
2006. The outlook for these ratings has been revised to stable from
positive. (See link below for a detailed list of the companies and
ratings.)
GAFRI�s ratings reflect its consistently profitable operating
performance, favorable liquidity position, solid risk-adjusted
capitalization and the breadth and depth of its distribution
channels. In addition, its established presence in the individual
tax-deferred annuity market provides a stable liability structure
evidenced by strong surrender charge protection and above average
persistency. The repurchase of the GAFRI common stock not already
owned by AFG and its affiliates in third quarter 2007�in addition
to expense savings and the simplification of the overall AFG
organizational structure�strengthens AFG�s commitment to the
operations organized under GAFRI.
The primary offsetting rating factor is the group�s relatively
high concentration of individual fixed annuity reserves, which A.M.
Best views as a highly competitive line of business with interest
rate sensitivity. GAFRI�s recent growth has focused on single
premium annuity products with single-tiered crediting rates, which
may be more susceptible to disintermediation risk than its
recurring premium business. A.M. Best believes the individual fixed
annuity line continues to be challenged by competition from
traditional annuity providers and alternative financial services
products, as well as from the persistent low interest rate
environment. In addition, as GAFRI increases its presence in the
equity-indexed annuity market through substantial premium growth in
recent years, overall demand for these products has diminished due
to ongoing product suitability and regulatory concerns, potentially
pressuring premium growth and profitability in the near term.
GAFRI�s efforts to expand its operations beyond the annuity market
continue to be focused on supplemental health products. A.M. Best
notes that these products are subject to regulatory and
market-related risks, which have the potential to impact retention
and profitability.
The revision of the rating outlook to negative for the key
life/health subsidiaries reflects A.M. Best�s negative outlook on
the industry as a result of the current economic environment, as
well as the group�s significant exposure to financial sector
corporate bonds and real estate-related investments, in particular,
non-agency residential mortgage-backed securities. In 2008,
realized investment losses exceeded the group�s statutory net
operating gain, prompting a capital contribution from the parent.
A.M. Best notes that while GAFRI has limited exposure to whole loan
commercial mortgages and its investments in residential and
commercial mortgage-backed securities are concentrated in the
senior most tranches, the group continues to maintain a significant
unrealized loss position within its investment
portfolio�approximately $1.5 billion at year-end 2008. While
GAFRI�s overall investment exposure is largely in line with its
peers, near-term capital growth could be constrained by the impact
of potential additional asset impairments.
For a complete list of Great American Financial Resources,
Inc.�s FSRs and ICRs, please visit
www.ambest.com/press/032703gafri.pdf.
The principal methodologies used in determining these ratings,
including any additional methodologies and factors, which may have
been considered, can be found at
www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service
credit rating organization dedicated to serving the financial and
health care service industries, including insurance companies,
banks, hospitals and health care system providers. For more
information, visit www.ambest.com.
American Financial (NYSE:AFG)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
American Financial (NYSE:AFG)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024
