Press Release - AUGUST 11, 2017

A.M. Best Affirms Credit Ratings of State Farm Life Insurance Company and State Farm Life and Accident Assurance Company

 Bruno Caron
Financial Analyst
+1 908 439 2200, ext. 5144

Rosemarie Mirabella
+1 908 439 2200, ext. 5892

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


A.M. Best has affirmed the Financial Strength Ratings of A++ (Superior) and the Long-Term Issuer Credit Ratings of “aa+” of State Farm Life Insurance Company and State Farm Life and Accident Assurance Company (together referred to as State Farm Life). The outlook of these Credit Ratings (ratings) is stable. Both companies are domiciled in Bloomington, IL.

The ratings of State Farm Life reflect its prominent role within the State Farm Group (State Farm), its strong brand-name recognition, sustained competitive advantages derived from an affiliated exclusive agency field force and diverse product portfolio of individual ordinary life and fixed annuity products. The ratings also recognize State Farm Life’s favorable statutory earnings, continued superior level of risk-adjusted capitalization, and generally conservative risk profile. Partially offsetting rating factors are ongoing spread compression within its annuity block, losses within its supplemental contracts line of business and exposure to life business with significant minimum guaranty rates.

A.M. Best considers State Farm Life’s risk-adjusted capitalization to be superior, as its regulatory capital ratio is among the strongest in the industry. In addition, State Farm Life finances its statutorily required excess reserves (Regulation XXX) related to term life insurance rather than externally through either domestic captives or offshore reinsurers. The amount of these excess reserves is sizeable and is viewed favorably by A.M. Best as it qualitatively enhances the group’s superior risk adjusted capitalization ratios.

While ordinary life generates a majority of State Farm Life’s earnings, A.M. Best notes that the individual annuity segment also has contributed to the company’s operating earnings, although in-force net investment margins are compressing. Additionally, supplemental contracts (primarily reflecting retained asset accounts) and its life block reflect significant minimum guarantees which A.M. Best believes will continue to be a drag on earnings going forward.

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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.

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