OLDWICK, NJ–(BUSINESS WIRE)–AM Best has confirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of The Empire Life Insurance Company (Empire Life) (Kingston, Ontario, Canada). At the same time, AM Best has confirmed Empire Life’s Long-Term Issue Credit Ratings (Long-Term IR). The outlook for these Credit Ratings (ratings) is stable. (See below for details of the Long-Term IRs.) Empire Life is a subsidiary of EL Financial Corporation Limited (EL Financial), which operates as a publicly traded Canadian investment and insurance holding company. At the same time, AM Best withdrew these ratings because it requested that it no longer participate in AM Best’s interactive rating process.
The ratings reflect Empire Life’s strong balance sheet, which AM Best rated as very strong, as well as its strong operational performance, neutral company profile and appropriate risk management for companies.
Empire Life maintains the highest level of risk-adjusted capital, as measured by Best’s Capital Adequacy Model (BCAR), which supports its business and investment risks despite its increased exposure to stock market risk. Risk-adjusted capitalization is enhanced by the high credit quality of the investment portfolio and the steady rise in aggregate capital levels due to favorable earnings and debt issuance. Empire Life’s capitalization has supported growth while maintaining levels that support stressed capital targets. In addition, operating results were consistently positive, although earnings fluctuated from year to year. AM Best expects earnings to remain positive in the short to medium term, with some expected fluctuations, mainly due to the effects of stock market volatility and interest rates. The company continues to benefit from a diversified revenue stream, including the asset management and individual insurance segment, along with continued solid results from the employee benefits segment, despite relatively flat revenue growth.
The following Empire Life long-term IRs have been confirmed with a stable outlook. At the same time, AM Best has revoked the Long-Term IRs at the company’s request.
— “bbb+” (good) on CAD 200 million 3.664% fixed/floating rate subordinated bonds, due March 15, 2028
— “bbb+” (good) on CAD 200 million 3.383% fixed/floating rate subordinated bonds, due December 16, 2026
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