AM Best Revises Outlooks to Stable for Kansas City Life Insurance Company; Affirms Credit Ratings of Its Subsidiaries
AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of "a-" (Excellent) of Kansas City Life Insurance Company (KCL) [OTCQX: KCLI]. The outlook revision reflects an easing of balance sheet pressure, as management has executed on capital plans that have enhanced the companies' level of available capital and risk-adjusted capitalization. KCL's risk-based capital ratio has returned to historical levels.
AM Best also revised the outlook of the Long-Term ICR to stable from negative for Old American Insurance Company, a wholly owned subsidiary of KCL. The ratings of KCL reflect its very strong balance sheet strength, marginal operating performance, neutral business profile, and appropriate enterprise risk management. AM Best expects KCL and Old American to maintain their capitalization levels but will monitor the impact of shareholder dividends and ongoing litigation related to universal life cost-of-insurance policyowner charges.
AM Best ha rivisto l'outlook da negativo a stabile e ha confermato il Financial Strength Rating (FSR) di A- (Eccellente) e il Long-Term Issuer Credit Rating (Long-Term ICR) di "a-" (Eccellente) della Kansas City Life Insurance Company (KCL) [OTCQX: KCLI]. La revisione dell'outlook riflette un alleggerimento della pressione sul bilancio, poiché la direzione ha attuato piani di capitale che hanno migliorato il livello di capitale disponibile e la capitalizzazione corretta per il rischio delle aziende. Il rapporto di capitale basato sul rischio di KCL è tornato ai livelli storici.
AM Best ha anche rivisto l'outlook del Long-Term ICR da negativo a stabile per la Old American Insurance Company, una controllata al 100% di KCL. Le valutazioni di KCL riflettono la sua molto forte solidità patrimoniale, performance operativa marginale, profilo d'affari neutro e gestione del rischio d'impresa adeguata. AM Best si aspetta che KCL e Old American mantengano i loro livelli di capitalizzazione, ma monitorerà l'impatto dei dividendi degli azionisti e delle controversie in corso relative ai costi della polizza di assicurazione sulla vita universale.
AM Best ha revisado las perspectivas de negativas a estables y ha afirmado la Calificación de Fortaleza Financiera (FSR) de A- (Excelente) y la Calificación de Crédito del Emisor a Largo Plazo (Long-Term ICR) de "a-" (Excelente) de la Kansas City Life Insurance Company (KCL) [OTCQX: KCLI]. La revisión de la perspectiva refleja un alivio de la presión sobre el balance, ya que la administración ha ejecutado planes de capital que han mejorado el nivel de capital disponible y la capitalización ajustada por riesgo de las empresas. La relación de capital basada en riesgo de KCL ha vuelto a niveles históricos.
AM Best también revisó la perspectiva del Long-Term ICR a estable desde negativa para la Old American Insurance Company, una subsidiaria completamente propiedad de KCL. Las calificaciones de KCL reflejan su muy fuerte solidez patrimonial, rendimiento operativo marginal, perfil comercial neutral y gestión adecuada del riesgo empresarial. AM Best espera que KCL y Old American mantengan sus niveles de capitalización, pero monitoreará el impacto de los dividendos de los accionistas y el litigio continuo relacionado con los cargos de política de costos de seguro vital universal.
AM Best는 전망을 부정적에서 안정적으로 조정했습니다 그리고 Kansas City Life Insurance Company (KCL) [OTCQX: KCLI]의 재무 건전성 등급(FSR)을 A- (우수)로, 장기 발행자 신용 등급(Long-Term ICR)을 "a-" (우수)로 확인했습니다. 이 전망 수정은 재무제표 압력 완화를 반영하며, 경영진은 기업의 가용 자본 수준과 위험 조정 자본화를 향상시킨 자본 계획을 실행했습니다. KCL의 위험 기반 자본 비율은 역사적 수준으로 돌아왔습니다.
AM Best는 또한 KCL의 100% 자회사인 Old American Insurance Company의 Long-Term ICR 전망을 부정적에서 안정적으로 수정했습니다. KCL의 평가는 매우 강한 재무 건전성, 미미한 운영 성과, 중립적인 비즈니스 프로파일 및 적절한 기업 위험 관리 를 반영합니다. AM Best는 KCL과 Old American이 자본 수준을 유지할 것으로 기대하지만, 주주 배당금 및 보편적 생명 보험 정책 소유자 요금과 관련된 진행 중인 소송의 영향을 모니터링할 것입니다.
AM Best a révisé les perspectives de négatives à stables et a confirmé la notation de solidité financière (FSR) de A- (Excellent) et la notation de crédit à long terme (Long-Term ICR) de "a-" (Excellent) de la Kansas City Life Insurance Company (KCL) [OTCQX: KCLI]. La révision de la perspective reflète un allègement de la pression sur le bilan, car la direction a mis en œuvre des plans de capital qui ont amélioré le niveau de capital disponible et de capitalisation ajustée en fonction du risque des entreprises. Le ratio de capital basé sur les risques de KCL est revenu à des niveaux historiques.
AM Best a également révisé la perspective du Long-Term ICR à stable depuis négative pour la Old American Insurance Company, une filiale à 100 % de KCL. Les notations de KCL reflètent sa très solide force financière, sa performance opérationnelle marginale, son profil commercial neutre et une gestion des risques d'entreprise appropriée. AM Best s'attend à ce que KCL et Old American maintiennent leurs niveaux de capitalisation, mais surveillera l'impact des dividendes des actionnaires et des litiges en cours liés aux frais de police d'assurance-vie universelle.
AM Best hat die Aussichten von negativ auf stabil revidiert und die Finanzstärke-Bewertung (FSR) von A- (Ausgezeichnet) sowie die langfristige Emittenten-Kreditbewertung (Long-Term ICR) von "a-" (Ausgezeichnet) für die Kansas City Life Insurance Company (KCL) [OTCQX: KCLI] bestätigt. Die Revision der Aussichten spiegelt eine Erleichterung des Drucks auf die Bilanz wider, da das Management Kapitalpläne umgesetzt hat, die das Kapitalniveau und die risikoadjustierte Kapitalisierung der Unternehmen verbessert haben. Das risikobasierte Kapitalverhältnis von KCL ist auf historische Niveaus zurückgekehrt.
AM Best hat auch die Aussichten des langfristigen ICR von negativ auf stabil für die Old American Insurance Company, eine 100%ige Tochtergesellschaft von KCL, revidiert. Die Bewertungen von KCL spiegeln die sehr starke Bilanzstärke, marginale operative Leistung, neutrales Geschäftsprofil und angemessenes Unternehmensrisikomanagement wider. AM Best erwartet, dass KCL und Old American ihre Kapitalisierungsniveaus beibehalten, wird jedoch die Auswirkungen von Aktionärsdividenden und laufenden Rechtsstreitigkeiten im Zusammenhang mit den Kosten von universalen Lebensversicherungsprämien überwachen.
- AM Best revised outlooks to stable from negative for Kansas City Life Insurance Company (KCL)
- KCL's risk-based capital ratio has returned to historical levels
- Management executed capital plans enhancing available capital and risk-adjusted capitalization
- AM Best assesses KCL's balance sheet strength as very strong
- Ongoing litigation related to universal life cost-of-insurance policyowner charges could impact earnings and balance sheet strength
- KCL faces strong competition from peers with larger economies of scale
- High upfront commissions and technology costs may be needed to support sales through Old American subsidiary
The ratings of KCL reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The ratings of Old American reflect its balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, limited business profile and appropriate ERM.
The ratings of Grange Life reflect its balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and appropriate ERM. The ratings of Old American and Grange Life also reflect implicit support from the greater organization.
The outlook revisions to stable for KCL’s ratings and Old American’s Long-Term ICR reflect an easing of balance sheet pressure, as management has executed on capital plans that have enhanced the companies’ level of available capital and risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). KCL’s risk-based capital ratio has also returned to historical levels. AM Best expects KCL and Old American to maintain their absolute and risk-adjusted capitalization levels. AM Best also will continue to monitor how shareholder dividends and ongoing litigation related to universal life cost-of-insurance policyowner charges impact the group’s overall balance sheet strength metrics. While the litigation has affected other carriers, it has the potential for an outsized impact on KCL’s more-limited earnings and its balance sheet strength.
KCL’s diversified product offerings includes ordinary life insurance, individual annuities and group life insurance; however, the organization faces strong competition from peers that have larger economies of scale. For example, in the final expense market, high upfront commissions and incremental innovation and technology costs may be needed to support sales through Old American, although the group’s strategic use of reinsurance with well-rated and long-standing third-party reinsurer partners helps reduce the impact of new business strain on available capital.
While Grange Life has modestly improved or maintained its balance sheet strength metrics in 2024, mainly due to reverting to slightly positive statutory earnings in 2023, the negative outlook reflects AM Best’s view that Grange Life has a weak risk-adjusted capitalization level, as measured by BCAR, and a modest level of absolute available capital and statutory earnings, which limits its financial flexibility. Grange Life operates as a closed block of business. All policies sold through Grange Life’s former agents have been written on KCL’s balance sheet since the start of 2020.
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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Stratos Laskarides
Senior Financial Analyst
+1 908 882 1995
stratos.laskarides@ambest.com
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Wayne Kaminski, FLMI, MBA
Associate Director
+1 908 882 1916
wayne.kaminski@ambest.com
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
Source: AM Best
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