OLDWICK, N.J.--(Business Wire)--A.M. Best Co. has affirmed the financial strength rating (FSR) of
A+ (Superior) and the issuer credit ratings (ICR) of "aa-" of Alfa
Insurance Group (Alfa) and its members. Concurrently, A.M. Best has
affirmed the ICR and debt ratings of "a" of Alfa Corporation
(NASDAQ/NM: ALFA).
Additionally, A.M. Best has affirmed the FSR of A+ (Superior) and
the ICR of "aa-" of Alfa Life Insurance Corporation (Alfa Life). The
outlook for all aforementioned ratings is stable. A.M. Best also has
affirmed the debt rating of AMB-1 on the commercial paper program of
Alfa Corporation. All companies, except Alfa Alliance Insurance
Company, are domiciled in Montgomery, AL. (See below for a detailed
list of the companies and ratings.)
The ratings reflect Alfa's solid risk-adjusted capitalization, its
long-term operating performance and sustainable competitive advantage.
These rating factors are derived from management's conservative
operating philosophy, exceptional customer service and the group's
firmly entrenched personal lines market position in Alabama.
The ratings also reflect Alfa's unfavorable operating results over
the last five years within its property lines of business, competitive
market conditions and its ongoing, although significantly reduced,
susceptibility to severe weather-related events due to its geographic
concentration of risks in the Gulf region. In addition, the group grew
surplus during this period and delivered improved capital adequacy in
the most recent period.
Currently, Alfa Mutual Insurance Company, Alfa Mutual Fire
Insurance Company and Alfa Mutual General Insurance Company (Alfa
Mutual Group) collectively maintain approximately 55% majority
ownership of Alfa Corporation and have unconditionally guaranteed all
of Alfa Corporation's outstanding commercial paper and long-term debt.
The ratings of Alfa Life recognize its key position as a
subsidiary of Alfa Corporation, its profitable operating performance
and strong stand alone risk-adjusted capitalization. The ratings also
acknowledge the steadily increasing new business production in its
core ordinary life segment enhanced by the strong sales of its term
life products. A.M. Best notes concerns regarding Alfa Life's narrow
geographic profile and heavy reliance on its affiliated
property/casualty agent field force. However, these concerns are
somewhat mitigated by the company's use of additional distribution
networks outside of Alabama and Alfa Life's effective cross-selling
activities within the organization.
The FSR of A+ (Superior) and ICRs of "aa-" have been affirmed for
Alfa Insurance Group and its following members:
-- Alfa General Insurance Corporation
-- Alfa Insurance Corporation
-- Alfa Vision Insurance Corporation
-- Alfa Mutual Insurance Company
-- Alfa Mutual Fire Insurance Company
-- Alfa Mutual General Insurance Company
-- Alfa Specialty Insurance Corporation
-- Alfa Alliance Insurance Company
The ICR of "a" has been affirmed for Alfa Corporation.
The following debt ratings have been affirmed:
Alfa Corporation--
-- "a" on $70 million senior floating rate notes, due 2017
-- AMB-1 on commercial paper program
The FSR of A+ (Superior) and ICR of "aa-" have been affirmed for
Alfa Life Insurance Corporation.
Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals
and health care system providers. For more information, visit
www.ambest.com.
A.M. Best Co.
Analysts:
David Fidecaro, 908-439-2200, ext. 5420
david.fidecaro@ambest.com
or
Steven Faulks, 908-439-2200, ext. 5035
steven.faulks@ambest.com
or
Public Relations:
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
Copyright Business Wire 2008
