ENP Newswire -
Release date- 29082014 -
The ICR upgrade reflects
Offsetting factors include challenges in executing its strategic business plans, maintenance of adequate capitalization levels as it manages its expected growth in interest-sensitive liabilities and ability to maintain improved operating results. Bankers Life has used significant levels of reinsurance to manage capital and business strain related to its fixed-annuity business. With plans to retain all new business going forward, Bankers Life may have difficulty improving upon its historical operating performance, noting the statutory loss recorded through the first six months of 2014. Absolute capital levels are also relatively modest and lower in 2014, reflecting dividends and the repayment of an internal surplus note.
Factors that could lead to a positive rating action include a sustained improvement in risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio, net operating performance trends that meet or exceed
The ratings and outlook for the property/casualty operations reflect adequate risk-adjusted capitalization, generally favorable loss experience as a result of extensive exposure management, as well as other profitability initiatives adopted by management in recent years. Partially offsetting these positive factors are the continuance of an elevated underwriting expense ratio and the challenges stemming from rapid new business growth, which could place pressure on capitalization and contribute to elevated underwriting ratios. In addition, the group's narrow geographic concentration exposes it to severe weather-related events.
Factors that could lead to positive rating action at the property/casualty operations include a sustainable profitable trend in operating performance, as well as improvement in risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio. Conversely, any deterioration in operating performance and erosion in the capital base and risk-adjusted capitalization could result in negative rating pressure.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of
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