A.M. Best Affirms Credit Ratings of Life Insurance Company of Alabama

A.M. Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of "bbb" of the Life Insurance Company of Alabama (LICOA) (Gadsden, AL) LINSA. The outlook of these Credit Ratings (rating) is stable.

The rating affirmations reflect LICOA's consistent capital growth and strong risk-adjusted capitalization measures supported by a trend of favorable net income. The company has a well-established brand and markets accident, health and life insurance products, primarily to rural areas in the Southeastern United States.

Offsetting rating factors include a declining trend of net premium that continued in 2016 as the number of reinsured policies increases. LICOA has also reported underwriting losses in four of the past five years due in part to some large claims from its unlimited cancer business, as well as increased administrative expenses. The company also has some exposure to below investment grade bonds partially due to downgrades on existing holdings. A.M. Best also believes the company is exposed to geographic risk as over three-quarters of direct premium revenue is derived from four states.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best's Credit Ratings.

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

Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170309006319/en/