A.M. Best Co. has affirmed the financial strength rating
(FSR) of B++ (Good) and upgraded the issuer credit rating (ICR) to “bbb+”
from “bbb” of Western
Life Assurance Company (Western Life) (High River, Alberta). The
outlook for both ratings is stable.
The ICR upgrade reflects Western Life’s
steadily increasing level of premium production and earnings, as well as
its sound capitalization. Profitability in its core business lines has
led to a very good risk-adjusted capital level. The company’s
transition to its new ownership under Western Financial Group Inc.
presents increased business opportunities, and elevated business
production is expected from affiliated distribution going forward, which
is reflected in the upgraded ICR.
Offsetting the positive rating factors are the challenges associated
with achieving greater market share in the Canadian arena due to
competition in the group and the individual accident and sickness
market. Despite recent growth, Western Life has yet to achieve
meaningful economies of scale. In addition, Western Life’s
parent’s strategy of acquisitions has
historically generated considerable levels of leverage and intangibles.
For Best’s Ratings, an overview of the rating
process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a full-service credit rating
organization dedicated to serving the financial services industries,
including the banking and insurance sectors. For more information, visit www.ambest.com.