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 firstname.lastname@example.org or Rachelle Morrow Senior Manager, Public Relations 908-439-2200, ext. 5378 email@example.com or Rosemarie Mirabella Managing Senior Financial Analyst 908-439-2200, ext. 5892 firstname.lastname@example.org or Jim Peavy Assistant Vice President, Public Relations 908-439-2200, ext. 5644 email@example.com
A.M. Best Affirms Ratings of Zurich Insurance Group, Ltd.’s Global Life North America Entities
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