A.M. Best Revises Outlook of Zale Life Insurance Company

  A.M. Best Revises Outlook of Zale Life Insurance Company

Business Wire

OLDWICK, N.J. -- January 22, 2013

A.M. Best Co. has revised the outlook to positive from stable and affirmed the
financial strength rating of B+ (Good) and issuer credit rating of ”bbb-” of
Zale Life Insurance Company (Zale Life) (Phoenix, AZ).

The revised outlook reflects Zale Life’s solid and consistent level of
risk-adjusted capitalization, positive earnings stream and the moderate
increase in its premium levels. A.M. Best also notes that Zale Life’s
investment portfolio is very short term in nature with little credit risk and
high levels of liquidity.

While recognizing Zale Life’s solid capital position and its consistent
profitability, A.M. Best notes that its growth is highly dependent upon the
strength of the overall economy along with the continued stabilization of the
retail operations at its parent, Zale Corporation (Zale Corp) (headquartered
in Irving, TX).  A.M. Best notes that a potential decrease in consumer
activity can still adversely impact the associated opportunities to market
Zale Life’s core credit products.

Factors that could lead to positive rating actions on Zale Life include
continued strong earnings, maintenance of solid capitalization levels,
increased strategic importance to the insurance group and continued
improvement in the retail operations of Zale Corp, which could lead to
expansion of Zale Life’s business profile.

Key rating drivers that could lead to an additional revision in the outlook
(back to stable) include a material deterioration in capitalization or
operating performance as well as contraction in retail sales at Zale Corp,
resulting in lower premium growth and a diminished business profile.

The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Best’s Credit Rating Methodology can be found at

Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more information,
visit www.ambest.com.

       Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


A.M. Best Co.
Colleene Parodi, 908-439-2200, ext. 5095
Senior Financial Analyst
Rosemarie Mirabella, 908-439-2200, ext. 5892
Managing Senior Financial Analyst
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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