When the industry you work in identifies you as one of the best in class, that’s worth celebrating.
Once again, rating agency A.M. Best Co. has reaffirmed its financial strength rating of A+ (Superior) for the insurance companies of National Life Group.
The ratings reflect NL Group’s balance sheet strength, which A.M. Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.
The ratings also reflect continued favorable trends in NL Group’s balance sheet strength metrics, supported by its risk-adjusted capitalization, which is at the strongest level and is projected to continue at that level, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, ongoing strategic initiatives implemented by management have helped to improve the operating performance assessment of NL Group over the intermediate term. Life/annuity sales showed continued strong growth in 2021, as did the results on NL Group’s alternative assets. Although NL Group has improved the risk profile of its investment portfolio through recent de-risking initiatives, the portfolio remains less conservative than some of its peers. Despite a challenging credit market, and against the backdrop of the pandemic, overall default losses and credit migrations remained very limited in 2021, as actual results continued to be well-below stressed scenarios.
In addition, NL Group’s NAIC risk-based capital ratio trend has continued to remain strong and well-above company targets and regulatory requirements over the past several years. NL Group also performed risk-based capital stress testing scenarios as a result of the COVID-19 pandemic, which showed risk-based capital levels remaining in excess of its defined risk thresholds. There has been moderate volatility in net income levels, driven by non-core earnings that reflect GAAP accounting reserving changes for indexed products, as well as short-term movement in equity markets and interest-rate curves.
NL Group has a long history of successfully targeting life insurance and annuity product solutions to the middle market segment through its growing agency force consisting of career and independent agents. NL Group’s strong sales growth trend continued through year-end 2021, but sales could be challenged to grow at a similar pace in the near future due to the continued effects of the pandemic, as well as the continued low interest rate environment and its impact on the insurance industry’s competitive landscape. Higher-than-expected mortality on NL Group’s life insurance business has continued. However, recent profitable growth has led to an improved market position and increasing market share through its niche products, such as its offerings in the K-12 educator and indexed universal life markets. The ERM assessment of appropriate is reflective of NL Group’s well-established governance structure, culture and risk management controls, which is continuing to evolve and become more sophisticated.
This is proof once again that fulfilling our promises and keeping our word while being mindful and responsible matters. Thank you all for what you do.