AM Greatest has affirmed the Monetary Power Ranking of B (Honest) and the Lengthy-Time period Issuer Credit score Scores of “bb” of American Federated Insurance coverage Firm (AFIC) and American Federated Life Insurance coverage Firm (AFLIC). The outlook of those Credit score Scores (rankings) is steady. Each firms are recognized collectively as American Federated Insurance coverage Corporations and are domiciled in Flowood, MS.
The rankings of AFIC replicate its steadiness sheet power, which AM Greatest categorizes as very robust, in addition to its robust working efficiency, restricted enterprise profile and marginal enterprise threat administration (ERM). The rankings additionally replicate drag from the mother or father holding firm, First Tower Finance Firm LLC (First Tower Finance).
The rankings of AFLIC replicate its steadiness sheet power, which AM Greatest categorizes as very robust, in addition to its enough working efficiency, restricted enterprise profile and marginal ERM. The rankings additionally replicate drag from the mother or father holding firm, First Tower Finance.
The American Federated Insurance coverage Corporations are oblique, wholly owned subsidiaries of First Tower Finance, a multiline specialty finance firm. Prospect Capital Company [NASDAQ: PSEC], a publicly traded closed-end funding firm, not directly owns an 80.1% majority curiosity in First Tower Finance and its subsidiaries.
AFIC supplies credit score insurance coverage protection on collateralized private loans originated by the patron finance subsidiaries of First Tower Finance, and involuntary unemployment insurance coverage.
AFLIC supplies credit score life and credit score accident and medical insurance coverages for people which have private loans originated by the patron finance subsidiaries of First Tower Finance. Given the merchandise provided by the 2 firms, AM Greatest will proceed to observe the potential results of COVID-19 and the macroeconomic surroundings on the enterprise profiles and operations of AFIC and AFLIC.
The drag to the rankings of AFIC and AFLIC displays the appreciable monetary leverage with a deficit in members’ fairness at First Tower Finance, stemming from a 2014 transaction involving the return of First Tower Finance’s capital to its members.
This press launch pertains to Credit score Scores which have been printed on AM Greatest’s web site. For all ranking info referring to the discharge and pertinent disclosures, together with particulars of the workplace answerable for issuing every of the person rankings referenced on this launch, please see AM Greatest’s Recent Rating Activity net web page. For extra info relating to the use and limitations of Credit score Ranking opinions, please view Guide to Best’s Credit Ratings. For info on the right media use of Greatest’s Credit score Scores and AM Greatest press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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Raymond Thompson, CPCU, ARe, ARM
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