AM Best Withdraws Credit Ratings of American Federated Life Insurance Company and American Federated Insurance Company

AUGUST 16, 2024 04:37 PM (EDT)

AM Best Withdraws Credit Ratings of American Federated Life Insurance Company and American Federated Insurance Company

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FOR IMMEDIATE RELEASE

OLDWICK - AUGUST 16, 2024 04:37 PM (EDT)
AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Ratings of "bb" (Fair) of American Federated Life Insurance Company (AFLIC) and American Federated Insurance Company (AFIC). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn these ratings at the request of the company to no longer participate in AM Best's interactive rating process. Both companies are known collectively as American Federated Insurance Companies and are domiciled in Flowood, MS.

The ratings of AFLIC and AFIC reflect their balance sheet strengths, which AM Best assesses as very strong, as well as their adequate operating performances, limited business profiles and marginal enterprise risk managements. The ratings also reflect the drag from their parent holding company, First Tower Finance Company LLC (First Tower Finance).

The American Federated Insurance Companies are indirect, wholly owned subsidiaries of First Tower Finance, a multiline specialty finance company. Prospect Capital Corporation [NASDAW: PSEC] has majority ownership in First Tower Finance and its subsidiaries.

AFLIC and AFIC provide various credit insurance coverages for individuals that have personal loans originated by the consumer finance subsidiaries of First Tower Finance.

The drag on the ratings of AFIC and AFLIC reflects the high interest expenses and considerable financial leverage with a deficit in members' equity at First Tower Finance.

The stable outlooks of AFIC and AFLIC reflect AM Best's expectation that both companies will maintain adequate operating results and very strong balance sheet assessment, while the negative impact of First Tower Finance will continue.

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.