AM Best Revises Issuer Credit Rating Outlook to Negative for Investors Heritage Life Insurance Company
AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb+” (Good) of Investors Heritage Life Insurance Company (IHLIC) (Frankfort, KY). The outlook of the FSR is stable.
The ratings reflect IHLIC’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The negative outlook for the Long-Term ICR reflects a decline in IHLIC’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), to adequate from strong. The decline in risk-adjusted capitalization was driven by notable increases in non-equity security and interest rate risks. AM Best will continue to monitor IHLIC’s capital position as the organization continues to grow its liability profile. The negative outlook also reflects an increased exposure to private credit assets. While the private allocation is diversified and provides IHLIC with a strong yield, it is increased from historical levels but less than many of its peers. The organization strategically uses affiliated and unaffiliated reinsurance support to minimize the impact of new business strain.
