A.M. Best Affirms Ratings of American National Insurance Company and Its Subsidiaries

  A.M. Best Affirms Ratings of American National Insurance Company and Its
  Subsidiaries

Business Wire

OLDWICK, N.J. -- June 14, 2013

A.M. Best Co. has affirmed the financial strength rating (FSR) of A
(Excellent) and issuer credit rating (ICR) of “a+” of American National
Insurance Company (ANICO) [NASDAQ:ANAT]. Additionally, A.M. Best has affirmed
the FSR of A (Excellent) and ICR of “a” of ANICO’s life insurance
subsidiaries: American National Life Insurance Company of Texas, Garden State
Life Insurance Company (League City, TX), Standard Life and Accident Insurance
Company, American National Life Insurance Company of New York (Glenmont, NY)
and Farm Family Life Insurance Company (Glenmont, NY). The outlook for all
ratings is stable. The above companies are headquartered in Galveston, TX,
unless otherwise specified.

The rating affirmations of ANICO are based on the company’s more than adequate
level of consolidated risk-adjusted capitalization, increased statutory and
GAAP earnings reflecting improving results in the property/casualty, life and
annuity segments, and diverse products and distribution platform that cover
life, annuity and health and property casualty businesses. The ratings also
reflect growth in ANICO's admitted and invested assets, driven primarily by
its fixed annuity-based asset accumulation, and incrementally, by growth in
its life insurance business. ANICO benefits from revenue and income from
diverse sources, which include its life/health and property/casualty
affiliates, as well as from its non-insurance affiliates. A.M. Best also notes
that the financial leverage at ANICO remains low relative to its consolidated
equity level.

Partially offsetting these positive rating factors is ANICO's large exposure
to interest-sensitive liabilities, variability in GAAP and statutory earnings
in the past, higher than average exposure to mortgage loans and real estate
holdings and the challenges of optimizing the company's returns on a sustained
basis.

The ratings of the life insurance subsidiaries of ANICO acknowledge their
strong risk-adjusted capitalization and continuing contribution to ANICO's
consolidated results. Partially offsetting these positive rating factors are
the life subsidiaries' somewhat fluctuating premiums and modest earnings
trends, limited business profiles and the challenges to grow their business
lines.

A.M. Best believes ANICO is well positioned at its current ratings. Key rating
factors that could result in negative rating actions include a decrease in
risk-adjusted capitalization, profitability below A.M. Best's expectations and
further concentration in interest-sensitive products including fixed
annuities.

In addition, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a” of
American National Property and Casualty Company (ANPAC) (Springfield, MO), its
subsidiary, American National General Insurance Company (Springfield, MO),
American National County Mutual Insurance Company (Galveston, TX) and its
separately-rated subsidiaries, American National Lloyds Insurance Company
(Galveston, TX) and Pacific Property and Casualty Company (San Jose, CA). A.M.
Best also has affirmed the FSR of A- (Excellent) and ICR of “a-” of ANPAC’s
separately-rated subsidiary, ANPAC Louisiana Insurance Company (Mandeville,
LA). The outlook for the ratings is stable.

Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a”
of Farm Family Casualty Insurance Company (Farm Family) and United Farm Family
Insurance Company. The outlook for these ratings is stable. These companies
are domiciled in Glenmont, NY.

The members of the ANPAC and Farm Family groups of companies are all
property/casualty subsidiaries of ultimate parent, ANICO. The ratings consider
the support provided by ANICO, as well as the synergies generated amongst and
between the groups and their parent.

Negative rating actions for the property and casualty subsidiaries could occur
if there were a sudden unexpected and material decline in their risk-adjusted
capitalization, a sustained deterioration in operating performance or
diminished liquidity measures.

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
www.ambest.com/ratings/methodology.

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.

Contact:

A.M. Best Co.
Marisa Bernardes – L/H
Financial Analyst
908-439-2200, ext. 5802
marisa.bernardes@ambest.com
or
David Fidecaro – P/C
Senior Financial Analyst
908-439-2200, ext. 5420
david.fidecaro@ambest.com
or
Rachelle Morrow
Senior Manager, Public Relations
908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
908-439-2200, ext. 5644
james.peavy@ambest.com
 
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