Market Overview

A.M. Best Affirms Credit Ratings of Farm Bureau Life Insurance Company

Share:

A.M. Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of
"a+" of Farm Bureau Life Insurance Company (FBL). Concurrently,
A.M. Best has affirmed the Long-Term ICR of "bbb+" of FBL Financial
Group Inc.
(NYSE:FFG), the holding company of FBL. The outlook of
these Credit Ratings (ratings) is stable. Both companies are domiciled
in West Des Moines, Iowa.

The ratings reflect FBL's balance sheet strength, which A.M. Best
categorizes as very strong, as well as its strong operating performance,
neutral business profile and appropriate enterprise risk management.

FBL's ratings also reflect its very strong risk-adjusted capitalization,
solid liquidity profile and its positive and above-industry-average
profitability metrics. FBL maintains an investment portfolio of good
overall quality with limited use of reinsurance and no utilization of
captives. Capital trends remain favorable primarily due to continued
organic earnings growth net of dividends, although statutory capital
declined modestly in 2017, attributable to a write-down of deferred tax
assets because of tax reform. FBL also benefits from good penetration of
life/annuity sales within its multiline distribution system, with strong
cross-sell rates that are consistently very favorable when benchmarked
against industry experience. Additionally, financial and operating
leverage at the holding company is modest with strong interest coverage
ratios.

Partially offsetting rating factors include continued spread compression
as FBL has a sizable percentage of annuity and ordinary life business in
force at guaranteed minimum crediting rates, although overall spreads
have remained adequate due to solid investment yields. Additionally, a
high percentage of the annuity liabilities lack surrender charge
protection, which exposes the company to some disintermediation risk if
there is a rapid increase in the interest rate environment. Finally,
while FBL has strong branding and distribution channels, its business
profile is regional with a concentration in the Midwest and Western
rural regions of the United 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
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

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

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com