A.M. BEST AFFIRMS FINANCIAL STRENGTH RATING OF ALFA INSURANCE GROUP
MONTGOMERY, Ala. (March 4, 2009) -- A.M. Best Co. has affirmed the A+ (Superior) financial strength rating (FSR) of Alfa Insurance Group (Alfa) with a stable outlook.
According to a news release issued by A.M. Best, "The ratings of Alfa recognize its solid risk-adjusted capitalization, recently favorable operating performance trend and sustainable competitive advantage. These strengths are partly offset by unfavorable operating results within its property lines of business, competitive market conditions and the group's reduced, yet ongoing susceptibility to severe weather-related events due to its geographic concentration of risks in the Gulf region."
A.M. Best also has affirmed the FSR of A+ (Superior) of Alfa Life Insurance Corporation (Alfa Life) with a negative outlook. This rating reflects Alfa Life's integral role in the recently privatized Alfa group of companies, sustained growth in new life business, positive but decreasing net operating gains before taxes and focus on enterprise risk management. Partially offsetting these strengths are Alfa Life's high exposure to mortgage-backed securities, the large impact of realized capital losses, narrow geographic profile and the challenges to grow its ordinary life production outside of Alabama.
"We are pleased to retain our A+ Superior rating which recognizes our position as one of the top insurance providers in an extremely competitive industry," Jerry A. Newby, Alfa President and Chief Executive Officer. "In a challenging economic environment, when many companies are struggling, we are working even harder to maintain the faith and confidence of our customers. A.M. Best's affirmations of our financial strength ratings are evidence that we are on the right track."
Concurrently, A.M. Best has withdrawn the ICR of "a", the debt rating of "a" on senior floating rate notes and AMB-1 on the commercial paper program of Alfa Corporation (Alfa Corp), and an "nr" has been assigned to the ICR. The withdrawal of Alfa Corp's ratings reflects its April 2008 privatization coupled with the fourth quarter 2008 repayment of its senior floating rate notes due 2017 and the replacement of its commercial paper program with a revolving bank line of credit.
For an overview of the A.M Best rating process methodologies and the latest rating information, please visit www.ambest.com. Consumers who are not currently Alfa customers can find information about their nearest agent at www.alfains.com or www.alfains.mobi for mobile users.
Alfa Insurance and its affiliates provide insurance and other financial services to more than 1 million customers in 12 states.