OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Financial Strength Rating (FSR) to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) to “a-” (Excellent) from “bbb+” (Good) of Liberty Bankers Life Insurance Company (Oklahoma City, OK), and its wholly owned life insurance subsidiaries, The Capitol Life Insurance Company (Dallas, TX) and American Benefit Life Insurance Company (Oklahoma City, OK), together known as the Liberty Bankers Group. The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect Liberty Bankers Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The rating upgrades are indicative of Liberty Bankers Group’s very strong balance sheet strength assessment, risk-adjusted capitalization, which has been assessed in the strongest category, as measured by Best’s Capital Adequacy Ratio (BCAR), and the company’s adequate reserves. The upgrades also reflect the group’s continued diversification of operations. While annuities remain the largest line of business, the life and health insurance lines now have become significant contributors to the group’s operating income. AM Best notes as offsetting factors the group’s elevated exposure to NAIC 2 bonds, as well as its real estate and mortgage loan portfolios, which increases the company’s investment risk profile. However, management has demonstrated the ability to manage these risks appropriately.
Return on equity is approaching double digits and net income has remained positive. Liberty Bankers Group recorded its highest earnings to date in recent periods and AM Best expects the company to maintain current operating levels.
Over time, Liberty Bankers Group has demonstrated its strategic organic and inorganic growth capabilities through innovations and acquisitions. Additionally, the company offers products that are deemed to be low to medium risk, thereby minimizing its product risk profile. The company’s ERM program, headed by the chief risk officer, is a formal, enterprise-wide function reinforced through all levels of the organization and supports its risk appetite.
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