OLDWICK: AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” of the primary life insurance subsidiaries of Protective Life Corporation (headquartered in Birmingham, AL), collectively known as Protective Life.
Additionally, AM Best has affirmed the Long-Term ICR of “a-” and the existing Long-Term Issue Credit Ratings (Long-Term IR) of Protective Life Corporation. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Protective Life’s balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.
The ratings of Protective Life and its life subsidiaries continue to reflect its strong risk-adjusted capitalization, and diversified and generally favorable operating results. Protective Life has a well-established core competency as an acquirer of life and annuity blocks of business and legal entities, which have contributed to earnings growth and allowed it to realize scale-related operating efficiencies.
While Protective Life’s balance sheet has equity and interest rate risk embedded in its variable annuity book, it benefits from a comprehensive hedging program that has reduced the net amount at risk due to strong equity market performance in recent years.
These strengths are offset partially by volatile statutory operating earnings and downward pressure on risk-adjusted capital as a result of its acquisition strategy.
Protective Life also maintains a relatively high level of real estate-related investments in its portfolio relative to its capital and surplus although it continues to perform well.
AM Best believes the company’s strong and consistent operating cash flows, liquidity resources and financial flexibility partially have mitigated any concern regarding these investments.
The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” have been affirmed with a stable outlook for the following primary life insurance subsidiaries of Protective Life Corporation: Protective Life Insurance Company; Protective Life and Annuity Insurance Company; West Coast Life Insurance Company; MONY Life Insurance Company.[the_ad id=”32940″]