AM Best Upgrades Credit Ratings of Members of National Teachers Association Life Group and Affirms Credit Ratings of Horace Mann Educators Corporation; Comments on Credit Ratings After Announced Acquisition
AM Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- for National Teachers Associates Life Insurance Company and its affiliate, NTA Life Insurance Company. The Long-Term Issuer Credit Ratings (ICRs) were also raised to 'a' from 'a-.' Concurrently, the FSR and ICR of Horace Mann Life Insurance Company and its property/casualty members remain at A (Excellent). The stable outlook reflects the companies' strong balance sheets and consistent performance despite recent challenges. Horace Mann's acquisition of Madison National Life is expected to diversify earnings and enhance value in the education market.
- Upgrade of Financial Strength Rating to A (Excellent) for NTA Life and its affiliate.
- Stable outlook for Horace Mann Life and its subsidiaries.
- Diversification in premiums and earnings expected from the acquisition of Madison National Life.
- None.
AM Best has the upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) to “a” (Excellent) from “a-” (Excellent) of National Teachers Associates Life Insurance Company (Addison, TX) and its affiliated entity, NTA Life Insurance Company of New York (New York, NY) (collectively referred to as NTA Life). In addition, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) of the property/casualty (P/C) members of Horace Mann Insurance Group (Horace Mann). AM Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Horace Mann Life Insurance Company (Horace Mann Life). Concurrently, AM Best has affirmed the Long-Term ICR of “bbb” (Good) of Horace Mann Educators Corporation (HMEC) [NYSE: HMN] and the Long-Term Issue Credit Rating of “bbb” (Good) on its
In addition, AM Best has commented that the ratings of HMEC and its insurance operating subsidiaries are unchanged following the disclosure of relevant public information. The comment follows the July 14, 2021, announcement by HMEC that the organization has entered into a definitive agreement to acquire Madison National Life Insurance Company, Inc. (Madison National), a subsidiary of Independence Holding Company (NYSE: IHC). Madison National is domiciled in Wisconsin and offers short- and long-term group disability insurance, group life insurance and other group products. They are a leading writer of employer-paid and employer-sponsored benefits provided to educators by K-12 school districts with multiple distribution relationships and capabilities. Madison National will afford HMEC with diversification in premiums and earnings and improve the value proposition for the education market. AM Best will continue to monitor the impact of this transaction, which is expected to close in January 2022.
The ratings of NTA Life reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The ratings also reflect support the company receives from its parent, HMEC, and full integration of their operations, as products of NTA Life are cross-sold as complementary products to the life and P/C products.
AM Best expects NTA Life’s risk-adjusted capital to remain at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). NTA Life has reported consistent net income and strong profitability ratios offering supplemental insurance products.
The ratings of Horace Mann reflect the group’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM.
Horace Mann maintains the strongest level of risk-adjusted capitalization. as measured by BCAR, which benefits from a solid investment portfolio and conservative reserving practices. The group continues to report favorable underwriting results driven by reduced frequency of claims due to the pandemic despite an increase in catastrophe losses.
The ratings of Horace Mann Life reflect its balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, neutral business profile and appropriate ERM.
Horace Mann Life has established itself as one of the largest providers of 403(b) tax-qualified fixed and variable annuities in the United States, focused on educators as its primary market. The company continues to report solid net income, which has contributed to capital and surplus growth. Operating performance is enhanced by favorable persistency, cost reduction initiatives and increased agent productivity.
The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed with a stable outlook for the following P/C members of Horace Mann Insurance Group:
- Horace Mann Insurance Company
- Horace Mann Property & Casualty Insurance Company
- Teachers Insurance Company
- Horace Mann Lloyds
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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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FAQ
What is the recent Financial Strength Rating upgrade for HMN?
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