AM Best Withdraws Credit Ratings of American Federated Life Insurance Company and American Federated Insurance Company
16 August 2024 - 9:54PM
Business Wire
AM Best has affirmed the Financial Strength Rating of B
(Fair) and the Long-Term Issuer Credit Ratings of “bb” (Fair) of
American Federated Life Insurance Company (AFLIC) and American
Federated Insurance Company (AFIC). The outlook of these Credit
Ratings (ratings) is stable. Concurrently, AM Best has withdrawn
these ratings at the request of the company to no longer
participate in AM Best’s interactive rating process. Both companies
are known collectively as American Federated Insurance Companies
and are domiciled in Flowood, MS.
The ratings of AFLIC and AFIC reflect their balance sheet
strengths, which AM Best assesses as very strong, as well as their
adequate operating performances, limited business profiles and
marginal enterprise risk managements. The ratings also reflect the
drag from their parent holding company, First Tower Finance Company
LLC (First Tower Finance).
The American Federated Insurance Companies are indirect, wholly
owned subsidiaries of First Tower Finance, a multiline specialty
finance company. Prospect Capital Corporation [NASDAW: PSEC] has
majority ownership in First Tower Finance and its subsidiaries.
AFLIC and AFIC provide various credit insurance coverages for
individuals that have personal loans originated by the consumer
finance subsidiaries of First Tower Finance.
The drag on the ratings of AFIC and AFLIC reflects the high
interest expenses and considerable financial leverage with a
deficit in members’ equity at First Tower Finance.
The stable outlooks of AFIC and AFLIC reflect AM Best’s
expectation that both companies will maintain adequate operating
results and very strong balance sheet assessment, while the
negative impact of First Tower Finance will continue.
This press release relates to Credit Ratings that have been
published on AM 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 AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please
view Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Christine DePalma, CPCU, ASLI Financial Analyst
+1 908 882 1732 christine.depalma@ambest.com Christopher
Sharkey Associate Director, Public Relations +1 908
882 2310 christopher.sharkey@ambest.com Doniella Pliss
Director +1 908 882 2245 doniella.pliss@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com