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A.M. Best Revises Issuer Credit Rating Outlook to Positive for Multinational Life Insurance Company


CONTACTS:

David Mitchell
Senior Financial Analyst
+1 908 439 2200, ext. 5556
david.mitchell@ambest.com

Sally Rosen
Vice President
+1 908 439 2200, ext. 5280
sally.rosen@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - SEPTEMBER 15, 2016 12:22 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 (FSR) of B++ (Good) and Long-Term ICR of “bbb” of Multinational Life Insurance Company (Multinational Life) (Puerto Rico). The outlook of the FSR remains stable.

The revised outlook for the Long-Term ICR reflects Multinational Life’s improved risk-adjusted capitalization and strong operating performance in 2016. As evidence of the ongoing success of Multinational Life’s turnaround plan, the company reported a sharp improvement in 2015 earnings; a trend that continued into 2016. However, A.M. Best notes that the boost to earnings largely has been driven by reserve releases in the life and annuity lines of business. Consequently, risk-adjusted capitalization has strengthened noticeably as earnings were accretive to capital. The company has made significant adjustments to its business mix, choosing to invest in the more profitable lines of business where growth opportunities exist, while de-emphasizing less favorable and mispriced products. Multinational Life’s expense reduction objectives and the application and achievement of better technological efficiency are proving to be essential to the renewed success in the organization’s Puerto Rico operation.

Partially offsetting these strengths are further intensification of geographic concentration risk as the company operates solely in Puerto Rico, and significant competition in core lines of business.

Continued growth of risk-adjusted capitalization, maintenance of favorable operating performance or increased support or added importance by the owners could result in positive rating movement. Conversely, negative rating movement could occur with further deterioration of Puerto Rico bonds, which could negatively impact risk-adjusted capitalization or reduce support or lower strategic importance by the owners.

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.

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AMB# Company Name
007447 Multinational Life Insurance Company