Insurance credit ratings agency A.M. Best Co. announced Thursday it has revised Universal Life Insurance Company’s outlook to “positive” from “stable” and affirmed its financial strength rating of B++ (Good) and “bbb+” issuer credit rating.
“The revised outlook reflects Universal Life’s well-established marketing presence and brand name recognition in the Puerto Rico insurance marketplace, the financial commitment of its parent, Universal Group Inc., its strong level of risk-adjusted capitalization, as well as its positive operating earnings trends and consistent premium growth,” A.M. Best said.
Furthermore, the ratings consider Universal Life’s “improved interest spread, despite the low interest rate environment, and strong market presence as a well-known provider of tax advantaged annuities in Puerto Rico.”
However, A.M. Best said the positive rating factors are offset by Universal Life’s geographic concentration risk in an economically challenged Puerto Rico market and its high interest sensitive product concentration.
While the company does market variable annuities, there is minimal risk to Universal Life as any benefit guarantees are reinsured, the credit agency said.