OLDWICK, N.J.--(BUSINESS WIRE)--AM 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, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Grange Life Insurance Company (Grange Life) (Columbus, OH). The outlook of these Credit Ratings (ratings) is negative.
In addition, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Sunset Life Insurance Company of America (Sunset Life), as well as Kansas City Life’s final expense life insurance subsidiary, Old American Insurance Company (Old American). The outlook of these ratings is stable. All companies are domiciled in Kansas City, MO, unless otherwise specified. All companies are wholly owned subsidiaries of Kansas City Life.
The ratings of Kansas City Life reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). Kansas City Life’s risk-adjusted capitalization is very strong, as measured by Best’s Capital Adequacy Ratio (BCAR), and the use of surplus notes any other forms of debt, as well as captive insurance, does not aid the group’s capital.
An offsetting rating factor is the past experience with one-time events negatively affecting capital and surplus. A high dividend payout ratio and fluctuating income also have negatively affected surplus growth. There is also a significant asset-liability mismatch, exposing the company to a high degree of reinvestment risk and resulting in a portfolio yield that is decreasing faster than that of the company’s peers.
The ratings of Grange Life reflect its balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, limited business profile and appropriate ERM.
The ratings of Sunset Life and Old American reflect the companies’ consolidated balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM.
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