A.M. Best Affirms Credit Ratings of Kansas City Life Insurance Company and Its Subsidiaries
OLDWICK, N.J.--(BUSINESS WIRE)--Sep 12, 2018--A.M. Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” of Kansas City Life Insurance Company (Kansas City Life). Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” of Kansas City Life’s wholly owned subsidiary, Sunset Life Insurance Company of America, and its final expense life insurance subsidiary, Old American Insurance Company. The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Kansas City, MO. These companies are collectively referred to as Kansas City Life Group.
The ratings of Kansas City Life Group reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
Kansas City Life Group maintains the strongest risk-based capital assessment, as measured by Best’s Capital Adequacy Ratio, and the group’s capital is not aided by any surplus notes, other forms of debt or use of captives. The balance sheet liability profile is diverse due to its broad product offerings. Additionally, the group has been able to maintain top-line sales growth despite a run-off on closed blocks of business. A.M. Best expects the successful acquisition of Grange Life Insurance Company, announced in June 2018, to improve further the group’s liability profile, as the reserve book of business being acquired is largely ordinary life policies, and the acquisition likely will be accretive to earnings.
An offsetting rating factor is the declining level of capital and surplus due to several one-time events, operating performance that has lagged similarly rated peers and a high dividend payout ratio. Operating performance also has been impacted negatively by the low interest rate environment and resulting decline in portfolio yield relative to the company’s crediting rates on its products, many of which are at their guaranteed crediting minimums.
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 web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view .
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CONTACT: A.M. Best
Erik Miller, CFA, +1-908-439-2200, ext. 5187
Senior Financial Analyst
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
Kenneth Johnson, CFA, CAIA, FRM, +1-908-439-2200, ext. 5056
Jim Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations
KEYWORD: UNITED STATES EUROPE NORTH AMERICA NEW JERSEY
INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE
SOURCE: A.M. Best
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PUB: 09/12/2018 03:59 PM/DISC: 09/12/2018 03:59 PM