OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings of “aa-” (Superior) of Mutual of Omaha Insurance Company and its subsidiaries, United of Omaha Life Insurance Company, Companion Life Insurance Company (Melville, NY) and United World Life Insurance Company. Concurrently, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IRs) of “a” (Excellent) of Mutual of Omaha Insurance Company’s surplus notes. (Please see below for a detailed listing of the IRs.) The outlook of these Credit Ratings (ratings) is stable. The group (collectively referred to as Mutual of Omaha) is domiciled in Omaha, NE, unless otherwise specified.
The ratings reflect Mutual of Omaha’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).
Mutual of Omaha’s balance sheet strength is very strong. The group’s risk-adjusted capitalization is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The organization continues to report a trend of capital and surplus growth that is supporting its insurance- and investment-related risks on a consolidated and individual operating entity basis. Mutual of Omaha has favorable cash flows from operations supported by good liquidity measures. Although the group’s operating leverage increased in 2023 due to its global funding program, operating leverage metrics are expected to remain within AM Best’s guidelines and Mutual of Omaha’s financial leverage remains adequate.
AM Best views Mutual of Omaha’s operating performance as strong as it has reported a trend of strong net premium growth that has exceeded 10% in four of the past five years. The group’s operating and net income improved in 2023, driven by favorable claims experience, which is a trend that AM Best expects to continue in the near term. The group’s 2022 results were negatively impacted by several factors, including statutory strain from new sales, lower value of equities, corporate-owned life insurance and changing interest rates.
Mutual of Omaha’s business profile is viewed as favorable. Mutual of Omaha is a large and well-established insurer with strong brand recognition operating via a national platform. The organization is well-recognized in the insurance and retirement markets, with a leading market position in Medicare supplement, a top 10 position in the group disability and voluntary product segments, and top 10 position in indexed universal life, structured settlement and PRT by number of contracts. Additionally, the group offers a diversified product portfolio that focuses on senior solutions, workplace solutions and financial solutions. Mutual of Omaha operates in all 50 states, as well as the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands.
Mutual of Omaha has an established formal ERM program that is assessed as appropriate. The design of the ERM program allows identification of potential events that may impact the organization, management of risk to remain within its risk tolerances and the achievement of organizational objectives. The program is overseen by the board of directors, management and other personnel, and there is an expansion of its risk culture throughout the organization. Mutual of Omaha has established clear risk appetite statements for guidance, which are embedded in the ERM policy.
The following Long-Term IR has been assigned with a stable outlook:
Mutual of Omaha Insurance Company—
-- “a” (Excellent) on $300 million 6.144% surplus notes, due 2064
The following Long-Term IRs have been affirmed with a stable outlook:
Mutual of Omaha Insurance Company—
-- “a” (Excellent) on $300 million 6.80% surplus notes, due 2036
-- “a” (Excellent) on $300 million 6.95% surplus notes, due 2040
-- “a” (Excellent) on $300 million 4.297% surplus notes, due 2054
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
