A.M. Best Affirms Ratings of Zurich Insurance Group, Ltd.’s Global Life North America Entities

  A.M. Best Affirms Ratings of Zurich Insurance Group, Ltd.’s Global Life
  North America Entities

Business Wire

OLDWICK, N.J. -- July 3, 2013

A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and
issuer credit ratings of “a” of Zurich American Life Insurance Company
(ZALICO) (Schaumburg, IL), Universal Underwriters Life Insurance Company
(UULIC) (Overland Park, KS) and Farmers New World Life Insurance Company
(FNWL) (Mercer Island, WA). The entities are collectively referred to as
Zurich Insurance Group Global Life North America (ZIG GLNA). The outlook for
all ratings is stable.

The ratings of ZIG GLNA reflect their strategic role in supporting their
ultimate parent Zurich Insurance Group Ltd’s (ZIG) business strategy of
marketing life insurance and retirement products to the U.S. affluent (through
ZALICO and UULIC) and middle marketplace (through FNWL). New business is
heavily supported by reinsurance arrangements offered by ZIG and capital
infusions, specifically to stabilize ZALICO’s capital and surplus levels.
Reinsurance support also extends to ZALICO’s legacy variable annuity products
and Business Owned Life Insurance (BOLI), which are reinsured by an affiliate
in order to mitigate statutory operating losses. ZIG is also supportive of
ZALICO’s strategy of increasing its penetration in the private placement
market and growing its corporate life business.

The ratings also reflect ZIG GLNA’s favorable risk-adjusted capitalization
levels and generally conservative investment portfolios.

Offsetting factors for ZALICO and UULIC include fluctuating capitalization and
operating earnings, ZALICO’s somewhat narrow operating profile and UULIC's
lack of top-line revenue growth. ZALICO faces execution risk as it implements
its business strategy to compete in the highly competitive group employee
benefits and private placement markets.

Factors that may lead to future positive rating actions for ZALICO and UULIC
include favorable operating results realized from successful execution of
their parent's U.S. initiatives. Factors that may lead to negative rating
actions include a material decline in risk adjusted capital, operating
earnings or loss of support from ZIG.

FNWL’s ratings reflect the company's excellent risk-adjusted capitalization
levels, continued favorable operating earnings and strategic role of
delivering protection and accumulation products to the mass middle market
through Farmers Exchanges’ Agent distribution network. Offsetting factors for
FNWL reflect modest investment spreads within its annuity block and increased
competition in its core middle markets.

FNWL is well positioned at its current rating level, although favorable or
unfavorable rating changes could be driven by a change in the ratings of its
ultimate parent, Zurich Insurance Company, and the sales performance of the
Farmers Exchanges.

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 Company, Inc.
Louis Savarese
Senior Financial Analyst
908-439-2200, ext. 5168
louis.savarese@ambest.com
or
Rachelle Morrow
Senior Manager, Public Relations
908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Rosemarie Mirabella
Managing Senior Financial Analyst
908-439-2200, ext. 5892
rosemarie.mirabella@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
908-439-2200, ext. 5644
james.peavy@ambest.com