AM Best Affirms Credit Ratings of Atlantic American Corporation and Its Subsidiaries
AM Best has affirmed strong credit ratings for Atlantic American (NASDAQ: AAME) and its subsidiaries. The Financial Strength Rating of A (Excellent) was affirmed for American Southern Insurance Group, while Bankers Fidelity Life Insurance Group (BFLIG) maintained an A- (Excellent) rating. The parent company received a Long-Term ICR of 'bbb-' (Good).
American Southern Group demonstrates very strong balance sheet strength with the highest risk-adjusted capitalization levels. However, they reported an underwriting loss in the first nine months of 2024 due to increased auto liability claims. BFLIG maintains strong capitalization but faces challenges with fluctuating operating performance, particularly in Medicare supplement underwriting results. The company's adjusted debt-to-capital ratio stands at 19.9% as of September 2024.
AM Best ha confermato forti rating creditizi per Atlantic American (NASDAQ: AAME) e le sue controllate. Il rating di solidità finanziaria di A (Eccellente) è stato confermato per il American Southern Insurance Group, mentre Bankers Fidelity Life Insurance Group (BFLIG) ha mantenuto un rating di A- (Eccellente). La società madre ha ricevuto un ICR a lungo termine di 'bbb-' (Buono).
Il American Southern Group dimostra una forza patrimoniale molto forte con i più alti livelli di capitalizzazione aggiustata per il rischio. Tuttavia, hanno riportato una perdita da sottoscrizione nei primi nove mesi del 2024 a causa dell'aumento delle richieste di risarcimento per responsabilità civile auto. BFLIG mantiene una forte capitalizzazione ma affronta sfide con fluttuazioni delle performance operative, in particolare nei risultati della sottoscrizione per i supplementi Medicare. Il rapporto debito-capitale aggiustato dell'azienda si attesta al 19,9% a settembre 2024.
AM Best ha afirmado fuertes calificaciones crediticias para Atlantic American (NASDAQ: AAME) y sus subsidiarias. La calificación de fortaleza financiera de A (Excelente) fue confirmada para American Southern Insurance Group, mientras que Bankers Fidelity Life Insurance Group (BFLIG) mantuvo una calificación de A- (Excelente). La empresa matriz recibió un ICR a largo plazo de 'bbb-' (Bueno).
American Southern Group demuestra una muy fuerte solidez patrimonial con los niveles más altos de capitalización ajustada al riesgo. Sin embargo, reportaron una pérdida por suscripción en los primeros nueve meses de 2024 debido al aumento de las reclamaciones de responsabilidad civil automotriz. BFLIG mantiene una fuerte capitalización pero enfrenta desafíos con fluctuaciones en el rendimiento operativo, particularmente en los resultados de suscripción de suplementos de Medicare. La relación deuda-capital ajustada de la empresa se sitúa en el 19.9% a septiembre de 2024.
AM Best는 Atlantic American (NASDAQ: AAME)와 그 자회사의 강력한 신용 등급을 확인했습니다. American Southern Insurance Group에 대한 재무 건전성 등급 A (우수)가 확인되었고, Bankers Fidelity Life Insurance Group (BFLIG)는 A- (우수) 등급을 유지했습니다. 모회사는 'bbb-' (양호)의 장기 ICR을 받았습니다.
American Southern Group은 매우 강력한 자산 건전성을 보여주며, 위험 조정 자본화 수준이 가장 높습니다. 그러나 2024년 첫 9개월 동안 자동차 책임 청구 증가로 인해 언더라이팅 손실을 보고했습니다. BFLIG는 강력한 자본화를 유지하고 있지만, 운영 성과의 변동성 문제에 직면해 있으며, 특히 Medicare 보조금 언더라이팅 결과에서 그렇습니다. 회사의 조정된 부채-자본 비율은 2024년 9월 기준으로 19.9%입니다.
AM Best a confirmé de fortes notations de crédit pour Atlantic American (NASDAQ: AAME) et ses filiales. La notation de solidité financière de A (Excellent) a été confirmée pour le American Southern Insurance Group, tandis que Bankers Fidelity Life Insurance Group (BFLIG) a maintenu une notation de A- (Excellent). La société mère a reçu un ICR à long terme de 'bbb-' (Bon).
Le American Southern Group démontre une très forte solidité financière avec les niveaux de capitalisation ajustés au risque les plus élevés. Cependant, ils ont signalé une perte de souscription au cours des neuf premiers mois de 2024 en raison de l'augmentation des demandes de responsabilité civile automobile. BFLIG maintient une forte capitalisation mais fait face à des défis avec des performances opérationnelles fluctuantes, en particulier dans les résultats de souscription des suppléments Medicare. Le ratio de dette ajusté par rapport au capital de l'entreprise est de 19,9 % en septembre 2024.
AM Best hat starke Kreditratings für Atlantic American (NASDAQ: AAME) und deren Tochtergesellschaften bestätigt. Die Finanzstärke-Bewertung von A (Ausgezeichnet) wurde für die American Southern Insurance Group bestätigt, während Bankers Fidelity Life Insurance Group (BFLIG) eine Bewertung von A- (Ausgezeichnet) beibehielt. Das Mutterunternehmen erhielt ein langfristiges ICR von 'bbb-' (Gut).
Die American Southern Group zeigt eine sehr starke Bilanzkraft mit den höchsten risikoadjustierten Kapitalisierungsniveaus. Allerdings berichteten sie in den ersten neun Monaten des Jahres 2024 über einen Underwriting-Verlust aufgrund gestiegener Autohaftpflichtansprüche. BFLIG hat eine starke Kapitalisierung, sieht sich jedoch Herausforderungen durch schwankende Betriebsergebnisse gegenüber, insbesondere in den Ergebnissen der Medicare-Zusatzversicherung. Das angepasste Verhältnis von Schulden zu Eigenkapital des Unternehmens liegt im September 2024 bei 19,9 %.
- Strongest level of risk-adjusted capitalization for both major subsidiary groups
- American Southern Group maintains profitable operations over the last decade
- Strong credit ratings affirmed: A (Excellent) for American Southern and A- (Excellent) for BFLIG
- Sufficient financial flexibility with access to capital markets
- Underwriting loss in first nine months of 2024 for American Southern Group
- Substantial annual stockholder dividend payments impacting capital
- Unfavorable underwriting results in BFLIG during 2024
- Volatile operating results in recent years for BFLIG
Insights
AM Best's affirmation of Atlantic American's credit ratings represents a stability signal in an otherwise challenging operational period for the insurer. The maintenance of the A (Excellent) rating for American Southern Group and A- (Excellent) for Bankers Fidelity Life Insurance Group, with stable outlooks across the board, indicates AM Best's confidence in the company's fundamental financial strength despite recent underwriting pressures.
The risk-adjusted capitalization for both subsidiaries remains at the "strongest" level according to Best's Capital Adequacy Ratio (BCAR), providing a important buffer against the operational volatility seen in 2024. This capital strength is particularly important given the underwriting losses reported through the first nine months of 2024 in both major business segments.
American Southern Group's underwriting loss stems from increased auto liability claims frequency and severity - a concerning trend that bears watching, though partially offset by favorable reserve development in general liability. Meanwhile, Bankers Fidelity's unfavorable results from elevated expenses and higher Medicare supplement loss ratios represent continued volatility in a segment that has seen fluctuating performance.
Atlantic American's corporate debt position appears manageable with a 19.9% adjusted debt-to-capital ratio, though the substantial dividend payments from American Southern to service this debt merit attention as they potentially limit capital reinvestment during this period of underwriting challenges.
The affirmation essentially recognizes the company's very strong balance sheet fundamentals while acknowledging the operational headwinds that management must address to improve performance for the remainder of 2024 and beyond.
The ratings of American Southern Group reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
American Southern Group’s balance sheet strength is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), moderate underwriting leverage and an appropriate reinsurance program. Financial flexibility is sufficient considering the group’s strongest BCAR scores and access to capital markets through Atlantic American. These positive rating factors are partially offset by the group’s substantial annual stockholder dividend payments to Atlantic American, who uses it to service its debt. The ratings also consider the financial leverage and interest coverage at Atlantic American, with an adjusted debt-to-capital ratio of
American Southern Group has exhibited operating profitability historically over the last decade, driven by positive underwriting and net investment incomes. Underwriting results have been profitable since 2014, attributed to management’s disciplined underwriting approach and local market expertise. However, an underwriting loss was reported through the first nine months of 2024, driven by a higher frequency and severity of auto liability claims. This was partially offset by favorable reserve development in general liability and lower loss adjusted expenses from reduced claims costs. The neutral business profile assessment reflects American Southern Group’s established position as an experienced writer of specialty program business, primarily for state governments, local municipalities and other large motor pools and fleets.
The ratings of BFLIG reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate ERM.
BFLIG maintains the strongest level of risk-adjusted capitalization, as measured by BCAR, for its insurance, investment and business risks. The impact of volatile operating results in recent years on capital and surplus levels has been offset by substantial capital contributions from Atlantic American. Balance sheet strength is enhanced by access to an undrawn external borrowing capacity and sufficient liquidity metrics. Fluctuating operating performance was driven by varying Medicare supplement underwriting results. Corrective actions, including rate increases, more stringent underwriting and business diversification to lower risk ancillary health and life products, drove positive underwriting results in the two years before 2024. However, the organization reported unfavorable underwriting results in 2024, owing to elevated expenses and a higher Medicare supplement loss ratio. BFLIG’s neutral business profile reflects the continued diversification of its business via growth of ancillary health and life premiums and further contraction of its Medicare supplement segment. The ratings also reflect BFLIG’s strategic role within the Atlantic American organization.
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.
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Christine DePalma, CPCU, ASLI
Financial Analyst
+1 908 882 1732
christine.depalma@ambest.com
Brian Virostek
Financial Analyst
+1 908 882 2417
brian.virostek@ambest.com
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
Source: AM Best
FAQ
What credit rating did AM Best assign to Atlantic American (AAME) in 2024?
How did American Southern Group's underwriting performance change in 2024?
What is AAME's current debt-to-capital ratio?
How has Bankers Fidelity Life Insurance Group's performance been affected by Medicare supplement business?
