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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 22, 2017 02:55 PM (EDT)
A.M. Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term ICR of “bbb” of SWBC Life Insurance Company (SWBC Life) (San Antonio, TX). The outlook for the FSR remains stable.
The revision to the Long-Term ICR outlook reflects SWBC Life’s sustained trend of positive direct premiums written and some expansion of its business profile through the addition of distribution relationships and additional state licenses. The strong premium growth trend has driven an increase in operating profits, which has contributed to growth in its risk-adjusted capital ratios. SWBC Life maintains a somewhat differentiated investment strategy through utilization of bond ETFs and a higher-than-average allocation to common stocks. However, its overall liquidity remains strong given its high allocation to large cap common stocks, which are dividend-paying. The ratings also recognize that SWBC Life’s ultimate parent, Southwest Business Corporation, continues to report strong financial results and supports SWBC Life operationally through shared services and the expansion of its marketing efforts.
Conversely, the absolute level of the company’s capital and surplus has remained modest, despite organic growth. The company operates exclusively in the highly competitive credit insurance marketplace and historically has been writing direct business in just one state, which contributes to a concentrated regulatory and economic profile. However, A.M. Best acknowledges the progress management has made in geographic expansion to date.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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