Fidelity Life gets rated
A.M. Best has affirmed Fidelity Life's financial strength rating of A- (excellent) and issuer credit rating of "a-" with the outlook for both ratings being stable.
Wednesday, February 2nd 2011, 5:08PM
The ratings reflect Fidelity Life's consistent operating profitability and corresponding surplus accumulation and continued new business growth.
Fidelity Life chief executive Milton Jennings says the company has maintained its A- rating, for the 14th consecutive year.
"We are continuing our cautious use of corporate resources to help stabilise experience strain this year."
A.M Best says Fidelity Life has been profitable over the past five years despite showing experience losses over the same period.
In 2010, the company's experience losses were mainly because of higher than planned acquisition and renewal costs, lapses and claims.
However, profits have continued to exceed experience strains, and the company's capital and surplus increased by 16.3% in fiscal year 2010 (average five-year growth rate: 20.8%).
A.M.Best says Fidelity Life's initiatives on reducing systemic strain through rate increases and cautious use of corporate resources are expected to gradually stabilise experience strain.
New business accumulation has remained strong for Fidelity Life for the 12 months to year-end June 2010. The company's pre-tax net income to net premiums written ratio in 2010 increased to 39.2% from 13.8% the
previous year, primarily due to strong investment income.
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