GFR Greenfire Resources Ltd

A.M. Best Co. has affirmed the financial strength ratings (FSR) of A (Excellent) and A- (Excellent) and the issuer credit ratings (ICR) of ๏ฟฝa๏ฟฝ and ๏ฟฝa-๏ฟฝ of the key life/health insurance subsidiaries of Great American Financial Resources, Inc. (GAFRI) [NYSE: GFR] (Cincinnati, OH). A.M. Best has also affirmed the ICR of ๏ฟฝbbb๏ฟฝ and the existing debt ratings of GAFRI๏ฟฝs downstream holding company, AAG Holding Company, Inc. (Cincinnati, OH). The outlook for the above ratings is stable. Additionally, A.M. Best has removed from under review and upgraded the FSRs to B++ (Very Good) from B+ (Very Good) and the ICRs to ๏ฟฝbbb+๏ฟฝ from ๏ฟฝbbb-๏ฟฝ of Central Reserve Life Insurance Company (Cleveland, OH) and Continental General Insurance Company (Omaha, NE). Concurrently, A.M. Best has assigned an FSR of B++ and an ICR of ๏ฟฝbbb+๏ฟฝ to Provident American Life and Health Insurance Company (Cleveland, OH). All three companies are life/health insurance subsidiaries of the recently acquired Ceres Group, Inc. (Ceres) (Cleveland, OH). The outlook for these ratings is positive. (See link below for a detailed listing of all ratings.) GAFRI๏ฟฝs ratings reflect the group๏ฟฝs consistent 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 has resulted in a stable liability structure evidenced by strong surrender charge protection and above average persistency. A.M. Best believes that GAFRI๏ฟฝs balance sheet has a manageable amount of leverage that can be reasonably serviced from the earnings generated by its primary insurance operations. The company๏ฟฝs debt-to-capital ratio is approximately 21%, with interest coverage of roughly six times. Going forward, A.M. Best expects GAFRI to maintain financial leverage at or below 25%. The primary offsetting rating factor is the group๏ฟฝs individual fixed annuity concentration, which A.M. Best views as a highly competitive line of business sensitive to movements in interest rates. GAFRI๏ฟฝs efforts to expand its operations beyond the annuity market continue to be focused on supplemental health products, as evidenced by the company๏ฟฝs recent acquisition of Ceres. These products are subject to regulatory and market related concerns, which have the potential to impact retention and future profitability. The upgrade of the ratings of Ceres๏ฟฝ operating companies reflects the greater financial flexibility and access to resources resulting from their recent acquisition by GAFRI. GAFRI also provides a scalable platform for efficiently consolidating Ceres๏ฟฝ existing Medicare supplement business, which substantially increases the size of GAFRI๏ฟฝs overall book, lifting its industry market share rank from a top-25 to a top-10 position. A.M. Best views favorably the potential expense synergies and greater efficiencies to be realized by consolidating Ceres๏ฟฝ supplemental health business with GAFRI๏ฟฝs and considers the overall book of business to be sound. While the Medicare supplement business carries the potential for earnings volatility, it also represents a growing source of earnings diversification for GAFRI, away from the company๏ฟฝs heavy concentration of individual annuities. For a complete listing of Great American Financial Resources, Inc.๏ฟฝs FSRs, ICRs and debt ratings, please visit www.ambest.com/press/112804gafri.pdf. A.M. Best Co., established in 1899, is the world๏ฟฝs oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best๏ฟฝs Web site at www.ambest.com. A.M. Best Co. has affirmed the financial strength ratings (FSR) of A (Excellent) and A- (Excellent) and the issuer credit ratings (ICR) of "a" and "a-" of the key life/health insurance subsidiaries of Great American Financial Resources, Inc. (GAFRI) (NYSE: GFR) (Cincinnati, OH). A.M. Best has also affirmed the ICR of "bbb" and the existing debt ratings of GAFRI's downstream holding company, AAG Holding Company, Inc. (Cincinnati, OH). The outlook for the above ratings is stable. Additionally, A.M. Best has removed from under review and upgraded the FSRs to B++ (Very Good) from B+ (Very Good) and the ICRs to "bbb+" from "bbb-" of Central Reserve Life Insurance Company (Cleveland, OH) and Continental General Insurance Company (Omaha, NE). Concurrently, A.M. Best has assigned an FSR of B++ and an ICR of "bbb+" to Provident American Life and Health Insurance Company (Cleveland, OH). All three companies are life/health insurance subsidiaries of the recently acquired Ceres Group, Inc. (Ceres) (Cleveland, OH). The outlook for these ratings is positive. (See link below for a detailed listing of all ratings.) GAFRI's ratings reflect the group's consistent 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 has resulted in a stable liability structure evidenced by strong surrender charge protection and above average persistency. A.M. Best believes that GAFRI's balance sheet has a manageable amount of leverage that can be reasonably serviced from the earnings generated by its primary insurance operations. The company's debt-to-capital ratio is approximately 21%, with interest coverage of roughly six times. Going forward, A.M. Best expects GAFRI to maintain financial leverage at or below 25%. The primary offsetting rating factor is the group's individual fixed annuity concentration, which A.M. Best views as a highly competitive line of business sensitive to movements in interest rates. GAFRI's efforts to expand its operations beyond the annuity market continue to be focused on supplemental health products, as evidenced by the company's recent acquisition of Ceres. These products are subject to regulatory and market related concerns, which have the potential to impact retention and future profitability. The upgrade of the ratings of Ceres' operating companies reflects the greater financial flexibility and access to resources resulting from their recent acquisition by GAFRI. GAFRI also provides a scalable platform for efficiently consolidating Ceres' existing Medicare supplement business, which substantially increases the size of GAFRI's overall book, lifting its industry market share rank from a top-25 to a top-10 position. A.M. Best views favorably the potential expense synergies and greater efficiencies to be realized by consolidating Ceres' supplemental health business with GAFRI's and considers the overall book of business to be sound. While the Medicare supplement business carries the potential for earnings volatility, it also represents a growing source of earnings diversification for GAFRI, away from the company's heavy concentration of individual annuities. For a complete listing of Great American Financial Resources, Inc.'s FSRs, ICRs and debt ratings, please visit www.ambest.com/press/112804gafri.pdf. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.