AM Best Revises Outlooks to Negative for New Era Group Members
AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of New Era Life Insurance Company, New Era Life Insurance Company of the Midwest and Philadelphia American Life Insurance Company, which are referred to as New Era Group (Houston, TX).
The ratings reflect New Era Group’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The revised outlooks to negative from stable reflect AM Best’s concerns over New Era Group's elevated level of risk within its investment portfolio, including the heightened allocation to commercial mortgage loans, which is well above the industry average, and an above-average allocation to below investment grade bonds, although this has been declining.
New Era Group has a large commercial loan portfolio in Texas, New York and California, representing a significant exposure relative to its capital and surplus as of year-end 2025. Though the current exposure to commercial loans is large, New Era Group does have a long track record of managing this asset class. Partially mitigating factors include low loan-to-value ratios and very low foreclosure rates. The below investment grade portfolio has been decreasing since 2023 but still represents an increased exposure relative to capital and surplus, especially when considered with the current commercial loan allocation. AM Best also notes that New Era Group has had certain impairments in recent years, which has increased the volatility coming from realized and unrealized capital gains and losses.
