|[November 13, 2012]
A.M. Best Upgrades Ratings of Family Heritage Life Insurance Company of America
OLDWICK, N.J. --(Business Wire)--
A.M. Best Co. has upgraded the financial strength rating (FSR) to
A (Excellent) from B++ (Good) and issuer credit rating (ICR) to "a" from
"bbb+" of Family Heritage Life Insurance Company of America (Family
Heritage) (Cleveland, OH). The ratings have been removed from under
review with positive implications and assigned a stable outlook.
Family Heritage's ratings were placed under review following the
announcement that it had signed a definitive agreement to be acquired by Torchmark
Corporation (Torchmark) (headquartered in McKinney, TX) (NYSE: TMK).
The transaction closed on November 1, 2012.
The rating upgrades reflect the financial strength of the Torchmark
organization as well as A.M. Best's expectations of continued strong
stand-alone capitalization and favorable trends in sales and earnings
for Family Heritage. As a result of the acquisition, Torchmark gains
access to Family Heritage's 1,200 captive agents and roughly 239,000
policies in force. A.M. Bet notes that the acquisition provides
Torchmark with the ability to expand its supplemental health business
segment with a higher margin, return of premium product feature.
A.M. Best believes Family Heritage will benefit from having a strong
parent with a recognized brand. Its new owner should help improve agent
recruiting and facilitate geographical expansion as well as provide
capital to fund anticipated premium growth within Family Heritage, as
needed. Initially, Family Heritage will represent only a modest portion
of Torchmark's overall revenue and earnings. Torchmark will utilize
Family Heritage as a platform for return of premium products going
The FSRs, ICRs and existing debt ratings of Torchmark and its other six
life/health subsidiaries are unchanged. The outlook for these ratings is
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best's rating process and contains the different rating criteria
employed in the rating process. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS
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