Content and data provided by various third parties and Fidelity - Terms of Use
Print.Print
Small font size A Larger text size A Largest text size A

AM Best Withdraws Credit Ratings of American Federated Life Insurance Company and American Federated Insurance Company

BY Business Wire | CORPORATE | 08/16/24 04:54 PM EDT

OLDWICK, N.J.--(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 Concurrently, AM Best has withdrawn these ratings at the request of the company to no longer participate in AM Best?s interactive rating process.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.

Copyright ? 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Source: AM Best

More Fixed Income News

All Fixed Income News

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

© 1998 – 2014 FMR LLC.

All rights reserved.
fir_news_article