OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to “bbb+” from “bbb” and affirmed the Financial Strength Rating (FSR) of B++ (Good) of New Era Life Insurance Company and its wholly owned life insurance subsidiaries, New Era Life Insurance Company of the Midwest and Philadelphia American Life Insurance Company. The outlook of the FSR has been revised to positive from stable while the outlook of the Long-Term ICR is positive. All companies are domiciled in Houston, TX, and collectively are known as New Era Group.
The ratings reflect New Era Group’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.
The rating upgrades reflect the group’s improved capital position and overall balance sheet strength. New Era Group’s capital and surplus increased year over year and the group experienced a significant increase in capital and surplus over the past five years, reflecting the reliable and organic growth of the group. New Era Group maintains a very strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), for its insurance and investment risks. Mitigating the group’s balance sheet strength assessment is its relatively high concentration in mortgage loans concentrated in Texas, as well as a higher allocation to below investment grade bonds (primarily Class 3).
The positive outlooks reflect the business profile of New Era Group as the ratings could be positively impacted if the group’s business profile continues to improve by diversifying its product line and geographic footprint. New Era is concentrated geographically, writing a large percentage of its business in Texas. As a niche company providing consumer-centric products, New Era Group has benefited from long-standing relationships with consumers and the loyalty of its agents, as evidenced by its consistent premium growth.
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