AM Best affirms the credit ratings of National Western Life Group, Inc. and its subsidiaries – InsuranceNewsNet | Business Insurance

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OLDWICK, NJ–(COMMERCIAL WIRE)–
I am better has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” (Excellent) of National Western Life Insurance Company (NWLIC) (Centennial, Colorado). At the same time, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Ozark National Life Insurance Company (Ozarks) (Kansas City, MO). In addition, AM Best has affirmed the Long-Term ICR of “bbb” (Good) of National Western Life Group, Inc. (based in austin, texas) [NASDAQ: NWLI], the parent holding company of NWLIC and Ozark. The outlook on these Credit Ratings (ratings) is stable.

The ratings reflect NWLIC’s balance sheet strength, which AM Best assesses as the strongest, as well as its adequate operating performance, neutral business profile and adequate enterprise risk management (ERM).

The ratings also reflect NWLIC’s stronger level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as its consistent GAAP operating earnings, although derivative accounting has resulted in some volatility. of earnings on a statutory accounting basis.

These strengths are offset by NWLIC’s high concentration of reserves in interest-sensitive products, which raises the risk of duration mismatches and spread compression, although products with high guaranteed minimum rates are largely reinsured. These risks are also reduced through a hedging program. Although premiums increased in each of the last two years, the company has experienced a downward trend in net written premiums over the past decade, driven by a reduction in annuity production and a change in strategy a few years ago. years that led NWLIC to stop accepting applications. for new life insurance business from international markets. Despite this movement, renewal premiums from international markets continue to represent a significant but declining portion of the group’s total premiums. NWLIC intends to focus on the U.S annuities and life insurance market.

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The ratings reflect Ozark’s balance sheet strength, which AM Best assesses as the strongest, as well as its adequate operating performance, limited business profile and appropriate ERM.

Ozark’s current business model is primarily focused on selling ordinary simplified life insurance products to the middle market through its captive agent channel and has slowly declined over time, as measured by sales. Ozark’s historically stable earnings pattern has continued since its acquisition by NWLIC. AM Best will continue to monitor the execution of the Ozark integration with NWLIC, particularly with respect to the integration of its risk management framework within NWLIC. Ozark has made significant progress since the acquisition in adopting shared practices and integrating into NWLIC’s business processes.

AM Best considers the holding company assessment for NWLIC to be neutral, with no financial or operating leverage.

AM Best affirms the credit ratings of National Western Life Group, Inc. and its subsidiaries – InsuranceNewsNet | Business Insurance 2022 09 webinar web banner 1

This news release relates to credit ratings that have been posted on AM Best’s website. For full rating information related 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 on the use and limitations of credit rating opinions, see Best Credit Score Guide. For information on the proper use of Best’s Credit Ratings, Best’s Performance Reviews, Best’s Preliminary Credit Reviews, and AM Best’s press releases, see Guide to the proper use of Best ratings and evaluations.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Based in the United StatesThe company does business in more than 100 countries with regional offices in London, amsterdam, Dubai, Hong Kong, Singapore Y Mexico City. For more information visit www.ambest.com.

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Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Luis Platas
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Source: AM Best