OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb+” of Liberty Bankers Life Insurance Company (Oklahoma, OK) and its wholly owned life insurance subsidiaries. Liberty Bankers Life Insurance Company, along with its subsidiaries —The Capitol Life Insurance Company (Dallas, TX) and American Benefit Life Insurance Company (Oklahoma, OK) — collectively are known as the Liberty Bankers Group.
The ratings reflect Liberty Bankers Group’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management (ERM).
The outlook revisions reflect the continued improvement in the Liberty Bankers Group’s ERM program, which AM Best believes constitutes a formal enterprise-wide risk management framework. The company previously had a chief risk officer (CRO) who was responsible for ERM, in addition to the role of chief actuary. The company recently hired a new CRO who is devoted fully to ERM, and who has made significant progress in advancing the ERM process.
From a balance-sheet perspective, the group benefits from very strong Best’s Capital Adequacy Ratio (BCAR) scores and adequate reserves. Partially offsetting these strengths is an elevated exposure to NAIC 2 bonds, as compared with life/annuity industry totals, in addition to high exposure to real estate and mortgage loans. The group does have a successful track record of managing these asset classes.
With respect to Liberty Bankers Group’s operating performance, return on equity is in the mid-single digits and premiums have increased over the last few years. Although moderate acquisition activity, along with increasing life insurance sales, have caused strain, overall net income has been positive in each of the last five years. The group has shown an ability to grow organically through new lines of business and acquisitions. It offers products that generally are deemed low risk and works with a large number of independent agents.
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