A.M. Best Affirms Credit Ratings of Western & Southern Financial Group Inc. and Its Subsidiaries
Concurrently,
The ratings reflect WSFG’s balance sheet strength, which
WSFG has the strongest capitalization with a high quality of surplus, favorable GAAP and statutory earnings with some volatility. On a qualitative basis, capital is enhanced given the modest use of reinsurance, no utilization of captives and no permitted accounting practices. Additionally, the ratings recognize the diversity in WSFG’s product offerings and distribution channels with an emphasis on middle market individuals, financial institutions and asset management, which contributes to additional earnings diversification. Recently, the group has expanded its distribution to
Partially offsetting rating factors include operating returns that are somewhat lower than industry aggregates due in part to strong capitalization levels, moderate retention of redundant reserves and modest adjusted statutory profitability within the group’s ordinary life line. The group has high interest rate exposure as most of its earnings are continued to be driven from annuities, although investment spreads remain relatively stable. Given the concentration in annuities, there is the potential for disintermediation risk in a rapidly rising interest rate environment. However, this risk is partially mitigated by adequate surrender charge protection and modest deferred acquisition costs to equity ratios. While the overall investment portfolio is of good credit quality exposure to below investment grade bonds, equities and asset-backed securities is higher than benchmarks; however, this risk is partially offset by much lower levels of mortgage exposure. Finally, while WSFG has expanded its product footprint and improved some market positions, its overall market position in life insurance and annuities has remained relatively unchanged and it faces ongoing competition from other companies in the highly competitive
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and
Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171208005377/en/
+1 908 439 2200, ext. 5109
[email protected]
or
+1 908 439 2200, ext. 5892
[email protected]
or
+1 908 439 2200, ext. 5159
[email protected]
or
+1 908 439 2200, ext. 5644
[email protected]
Source:
EDITORIAL: Sex, lies and politics
Marketplace Open Enrollment Ends on December 15
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News