A.M. Best Co. has affirmed the financial strength rating (FSR) of
A (Excellent) and issuer credit rating (ICR) of “a+” of American
National Insurance Company (ANICO) (NASDAQ: ANAT). Additionally,
A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a” of American
National Life Insurance Company of Texas, Garden State Life
Insurance Company (League City, TX), Standard Life and Accident
Insurance Company, American National Life Insurance Company of
New York (Glenmont, NY) and Farm Family Life Insurance Company
(Glenmont, NY), all subsidiaries of ANICO. The outlook for all ratings
is stable. The above companies are headquartered in Galveston, TX,
unless otherwise specified.
The rating affirmations of ANICO are based on its good consolidated
risk-adjusted capitalization, higher GAAP and statutory earnings
reflecting improving results in the property/casualty segment, and
diverse product offerings. The ratings also reflect growth in ANICO's
admitted and invested assets, driven primarily by its fixed
annuity-based asset expansion and, incrementally, by growth in its life
insurance business. ANICO benefits from revenue and income from diverse
sources, which include its life/health and property/casualty affiliates,
as well as from its non-insurance affiliates. A.M. Best also notes that
the financial leverage at ANICO remains modest relative to its
consolidated equity level.
Partially offsetting these positive rating factors is ANICO's high
exposure to interest-sensitive liabilities, variability in GAAP and
statutory earnings over the past, high exposure to mortgage loans and
real estate holdings and the challenges of optimizing the company's
returns on a sustained basis.
The ratings of the life insurance subsidiaries of ANICO acknowledge
their improved operating trends, strong risk-adjusted capitalization and
continuing contribution to ANICO's consolidated results. Partially
offsetting these positive rating factors are the life subsidiaries'
somewhat fluctuating premiums and earnings trends, limited business
profiles and the challenges to grow their business lines.
A.M. Best believes ANICO is well positioned at its current ratings. Key
rating factors that could result in negative rating actions include a
decrease in risk-adjusted capitalization, profitability below A.M.
Best's expectations and further concentration in interest-sensitive
In addition, A.M. Best has affirmed the FSRs of A (Excellent) and ICR of
“a” of American National Property and Casualty Company (ANPAC)
(Springfield, MO), its subsidiaries, American National General
Insurance Company (Springfield, MO) and American National County
Mutual Insurance Company (Galveston, TX) and its separately-rated
subsidiaries, American National Lloyds Insurance Company
(Galveston, TX) and Pacific Property and Casualty Company (San
Jose, CA). A.M. Best has also affirmed the FSR of A- (Excellent) and ICR
of “a-” of ANPAC’s separately-rated subsidiary, ANPAC Louisiana
Insurance Company (Mandeville, LA). The outlook for the ratings is
Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and ICR of
“a” of Farm Family Casualty Insurance Company (Farm Family) and
United Farm Family Insurance Company. The outlook for the ratings is
stable. These companies are domiciled in Glenmont, NY.
The members of the ANPAC and Farm Family groups of companies are all
property/casualty subsidiaries of ultimate parent ANICO. The ratings
also consider the support provided by ANICO, as well as the synergies
generated amongst and between the groups and their parent.
Negative rating actions for the property and casualty subsidiaries could
occur if there were a sudden unexpected and material decline in
risk-adjusted capitalization, a sustained deterioration in operating
performance or diminished liquidity measures.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Additional key criteria utilized
include: “Catastrophe Analysis in A.M. Best Ratings”; “Rating Members of
Insurance Groups”; “Risk Management and the Rating Process for Insurance
Companies”; “Understanding BCAR for Property/Casualty Insurers”; and
“Understanding BCAR for Life/Health Insurers.” Best’s Credit Rating
Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com
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