OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb+” (Good) to American Century Life Insurance Company (American Century) (Columbus, Ohio). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect American Century’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
American Century’s strong level of balance sheet strength is underpinned by its risk-adjusted capitalization being assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects American Century’s risk-adjusted capitalization to remain at the strongest level prospectively. Although American Century has an elevated portion of invested assets allocated toward mortgage loans, the company’s bond portfolio is comprised of primarily NAIC 1 securities.
American Century’s operating performance is assessed as adequate. Consistent operating and net earnings have been reported over at least the latest five-year period. Earnings are driven by the spread of the company’s annuity offerings.
American Century is licensed to operate in 40 states, with its premium and distribution concentrated in Texas, where the company was domiciled prior to 2023. The company, now domiciled in Ohio, currently offers two products: a single premium deferred annuity and a single premium immediate annuity. Products are mainly distributed through the independent agency channel.
The company’s ERM is assessed as appropriate, with the management team monitoring and addressing risks quickly, as they arise. While the company does not currently make use of reinsurance, it does utilize a number of third-party vendors in operations.
Negative rating actions could occur if there is a material deterioration in American Century’s balance sheet strength such that it no longer supports the strong assessment. Positive rating actions, while unlikely, could occur if the company’s operating metrics remain profitably above industry averages as the company gains scale. AM Best will closely monitor American Century’s results.
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