AM Best has revised the outlooks to negative from stable for the Long-Term Issuer Credit Ratings and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) of American Family Mutual Insurance Company and its affiliates.
The negative outlooks for American Family reflect the significant earnings deterioration in the first half of 2022, suggests AM Best.
It also notes that underwriting results have been impacted by catastrophe losses from abnormal weather events in the Midwest in recent years, with combined ratios being pressured by rising indemnity costs. It adds that the earnings deterioration also resulted in reduced capital levels.
The ratings of American Family exhibit its balance sheet strength, says AM Best, which it assesses as strongest, as well as its adequate operating performance, favourable business profile, and appropriate enterprise risk management.
Additionally, AM Best has revised the outlook to negative from stable for the Long-Term ICR and affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of American Family Life Insurance Company (AFLIC) The outlook of the FSR is stable.
AM Best states that the ratings of AFLIC consider its balance sheet strength, which it assesses as strongest, as well as its adequate operating performance, neutral business profile, and appropriate ERM.
The ratings agency affirmed that the negative outlooks for AFLIC primarily indicate the overall business condition of the members of the American Family.
AM Best adds, “As AFLIC has a strong association with the property/casualty operations and currently receives lift from the lead rating unit, any change in the rating assigned to American Family will have a corresponding effect on AFLIC’s ratings.”
