A.M. Best Affirms Ratings of AMEX Assurance Company
August 21 2015 - 3:08PM
Business Wire
A.M. Best has affirmed the financial strength rating of A
(Excellent) and the issuer credit rating of “a+” of AMEX
Assurance Company (AMEX Assurance) (Chicago, IL). AMEX
Assurance is a wholly owned subsidiary of American Express
Company (American Express) [NYSE: AXP]. The outlook for both
ratings is stable.
The ratings reflect AMEX Assurance’s strong capital position and
five-year trend of operating income generated by providing
insurance products to American Express card members. Offsetting
these positive rating factors is AMEX Assurance’s limited business
scope, as the majority of its products is confined primarily to
American Express card members and lack in growth in policyholders’
surplus as demonstrated over the past five years. This is the
result of all of AMEX Assurance’s prior years’ net income being
returned to American Express through stockholder dividends.
AMEX Assurance’s strong capital position is reflective of its
conservative investment risk profile, generally favorable reserve
development and favorable operating results driven by solid profit
margins. The favorable operating results reflect the company’s low
cost, direct marketing strategy and its emphasis on travel-related
and other ancillary insurance coverages offered primarily to
American Express card members.
As AMEX Assurance’s stable outlook indicates, A.M. Best expects
the ratings and outlook to be maintained over the near term.
However, there may be future negative rating actions if there is a
decline in premium writings caused by a billing system issue,
increased competition in the payments industry or a global economic
downturn or terrorist event that results in a sustained reversal in
operating profitability. Additionally, a potential negative rating
action and/or outlook change may occur if American Express
increases its dividend requirement, which results in a material
decline in risk-adjusted capitalization as represented by Best’s
Capital Adequacy Ratio (BCAR).
This press release relates to rating(s) that have been
published on A.M. 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 visit A.M.
Best’s Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2015 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20150821005633/en/
A.M. BestKevin Dorsey, 908-439-2200, ext.
5401Senior Financial
Analystkevin.dorsey@ambest.comorRichard Attanasio,
908-439-2200, ext. 5432Vice
Presidentrichard.attanasio@ambest.comorChristopher
Sharkey, 908-439-2200, ext. 5159Senior Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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