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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 20, 2019 09:42 AM (EDT)
AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of American Equity Investment Life Insurance Company (AEILIC) and its subsidiaries, American Equity Investment Life Insurance Company of New York (Lake Success, NY) and Eagle Life Insurance Company, collectively referred to as AEL. Concurrently AM Best has affirmed the Long Term ICR of “bbb-” of American Equity Investment Life Holding Company [NYSE: AEL] and its existing Long Term Issue Credit Ratings (Long-Terms IRs). The outlook for all of these Credit Ratings (ratings) is stable. All companies are domiciled in West Des Moines, IA, unless otherwise specified. (Please see below for detailed listing of the Long-Term IRs).
The ratings reflect AEL’s balance sheet strength, which AM Best categorizes as adequate, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
AEL maintains adequate risk-based capital and maintains a high quality of capital with minimal use of surplus notes, captives and reinsurance. AEL has a track record of profitable premium growth, and maintains returns that are above the industry average. AEL also maintains a strong market position in the increasingly competitive fixed index annuity segment nationally with a leadership position in the independent agent channel.
While AEL’s business profile is neutral, it remains concentrated given its focus on fixed index annuity products and a declining overall market share position as growth in the bank and broker/dealer segment has outpaced the insurance industry’s traditional independent agent channel. This is in part due to the U.S. Department of Labor’s “Fiduciary” rule, which despite being vacated, has left a market impact and ongoing regulatory uncertainty regarding the adoption of suitability standards from the NAIC.
While there is debt at the holding company, leverage ratios and interest coverage ratios are within AM Best’s tolerance and do not unduly burden the operating company and provide the insurance operations access to the capital markets and can aid in liquidity if needed.
The following Long-Term IR has been affirmed with a stable outlook:
American Equity Investment Life Holding Company
— “bbb-” USD 500 million 5% senior unsecured notes due 2027
The following indicative Long-Term IRs under the shelf registration have been affirmed with a stable outlook:
American Equity Investment Life Holding Company
— “bbb-” on senior unsecured debt
— “bb+” on subordinated debt
— “bb” on preferred stock
American Equity Capital Trust V and VI
— “bb” on trust preferred securities
This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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