A.M. Best Affirms Ratings of National Western Life Insurance Company

  
    
  
  
    
      A.M. Best Co. has affirmed the financial strength rating (FSR) of 
      A- (Excellent) and issuer credit rating (ICR) of “a-” 
      of National Western Life Insurance Company (NWL) (Denver, CO) 
      (NASDAQ: NWLIA). The outlook for both ratings remains positive.
    
    
      These rating actions reflect NWL’s diverse 
      business profile of accepting applications from residents both in the 
      United States and in various international territories, its solid 
      operating results, superior risk-adjusted capitalization and increasing 
      statutory adjusted capital and surplus and GAAP equity trends. 
      Offsetting these strengths are the challenges for NWL to manage its 
      increasing exposure to interest sensitive annuity and universal life 
      liabilities and continuing to grow its domestic and international 
      ordinary life businesses.
    
    
      In maintaining the positive outlook, A.M. Best recognizes NWL’s 
      strong competitive position internationally, which continues to provide 
      diversification of revenue, insurance risk and profitable earnings. The 
      outlook also reflects management’s efforts to 
      continue to grow its U.S. domestic ordinary life segment, which A.M. 
      Best believes can provide further diversification of NWL’s 
      business and earnings profile, as well as its ongoing efforts to further 
      enhance and refine its asset/liability and enterprise risk management 
      processes.
    
    
      NWL’s net premium and deposit growth has been 
      driven mainly by sales of its fixed-indexed annuity (FIA) products. 
      While NWL’s annuity growth has resulted in 
      greater interest rate and equity market risks, the company’s 
      strong risk-adjusted capitalization, surrender charge protection and 
      market value adjustment features partially mitigate these risks. In 
      noting NWL’s growth in FIAs, A.M. Best 
      recognizes NWL’s prudent product design and 
      customer profiles, effective hedging programs and active market conduct 
      and compliance programs. However, A.M. Best remains cautious over the 
      potential declines in the industry’s future 
      FIA sales and its impact on earnings given the increasing due diligence 
      demanded to comply with the prevailing heightened regulatory environment.
    
    
      For Best’s Ratings, an overview of the rating 
      process and rating methodologies, please visit www.ambest.com/ratings.
    
    
      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.