Market Overview

A.M. Best Affirms Credit Ratings of National Western Life Insurance Company


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 National Western Life Insurance Company (NWLIC)
(Centennial, CO). Concurrently, A.M. Best has affirmed the Long-Term ICR
of "bbb" of National Western Life Group, Inc. (headquartered in
Austin, TX) (NASDAQ:NWLI), the parent holding company of NWLIC. The
outlook of these Credit Ratings (ratings) is stable.

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

The ratings also reflect NWLIC's relatively diversified business profile
through its domestic life, international life and annuity operating
segments. NWLIC consistently has been profitable on an operating basis,
although derivative accounting has resulted in some volatility on a
statutory basis. The investment portfolio has a lower percentage of
higher risk assets than the industry average, and robust asset-liability
matching and hedging programs enhance the balance sheet profile.
Additionally, A.M. Best notes that the formation of the holding company
structure and a line of credit adds financial flexibility. A.M. Best
also notes that currently there is no debt outstanding at either the
operating company or the holding company, and no debt issuances are
anticipated in the near term.

These strengths are offset by NWLIC's high concentration of reserves in
interest-sensitive products, elevating the risk of duration mismatches,
spread compression, and in the case of its large fixed indexed annuity
book, the potential volatility in the cost and efficiency of its hedging
program. In addition, the company has reported a declining trend in net
premiums written in recent years, resulting from the strategic reduction
in annuity production, and ceasing the acceptance of new life insurance
business from several of its larger international markets.

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
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases

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