Business & Finance
Business and Finance
Business and Finance
Thu, June 9, 2011
Wed, June 8, 2011 A.M. Best Upgrades Ratings of Presidential Life Insurance Company and Presidential Life Corporation
OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has upgraded the financial strength rating to B++ (Good) from B+ (Good) and issuer credit rating (ICR) to abbba from abbb-a of Presidential Life Insurance Company (Presidential Life) (Nyack, NY). A.M. Best also has upgraded the ICR to abba from abb-aof the parent company, Presidential Life Corporation (NASDAQ: PLFE). The outlook for all ratings is stable.
"Risk Management and the Rating Process for Insurance Companies"
The rating upgrades reflect Presidential Lifea™s solid capitalization, profitable earnings achieved through strong, albeit volatile, investment income, resolution of litigation issues from prior management and shareholder proxy issues, along with a future business strategy underpinned by growth, which builds on the companya™s core competencies within the retail insurance annuity business segment.
Partially offsetting these positive rating factors is Presidential Lifea™s concentrated market profile operating as a mono-line insurer writing predominantly fixed annuity business in a limited geographic area with a narrow product offering, continued future investment income volatility due to exposure to the limited partnership investment asset class and execution risks associated with the companya™s expansion plans.
Despite these concerns, Presidential Lifea™s outlook is reflective of managementa™s ability to manage the companya™s continued elevated investment risk profile, improving capitalization and A.M. Besta™s expectation that solid operating performance will be sustained over the near to medium term and will contribute to organic surplus growth.
The principal methodology used in determining these ratings is [ Besta™s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition ], which provides a comprehensive explanation of A.M. Besta™s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: aRisk Management and the Rating Process for Insurance Companiesa; aUnderstanding BCAR for Life and Health Insurersa; and aAssessing Country Risk.a Methodologies 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 ].
Copyright © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
