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FOR IMMEDIATE RELEASE
OLDWICK - DECEMBER 13, 2017 04:00 PM (EST)
A.M. Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating to “bbb” from “bbb-” of Citizens Security Life Insurance Company (Citizens Security) (Louisville KY), the insurance subsidiary of Citizens Financial Corporation (Citizens Financial) [OTC: CFIN]. The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect Citizens Security’s balance sheet strength, which A.M. Best categorizes as adequate, as well as its strong operating performance, limited business profile and marginal enterprise risk management.
The rating upgrades reflect Citizen Security’s favorable risk-adjusted capital position, positive earnings trends over the past several years and maintaining an established niche market position. Citizens Security’s level of risk-adjusted capital has generally improved over the last five years, supported by consistent profitability over that period. Additionally, the company operates in a unique market providing individual dental and other ancillary health products to a niche segment of the senior population.
Offsetting rating factors include a lack of product and geographic diversification, as the vast majority of the company’s net premium is derived from the dental line of business, and over one-half is derived from five states. Additionally, several acquisitions of medical management companies in recent years by its parent holding company, Citizens Financial, have resulted in increased financial leverage at the parent holding company.
As a result, Citizens Security’s capital and surplus growth has been limited due to dividend requirements to service the debt and build the holding company’s cash position.
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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