risingstarlife
Expert
- 27
So i hear Lincoln heritage just got downgraded by the am best. They are also showing them as a negative outlook. Any one have any info.?
Lincoln Heritage Have You Heard ?
- Thread starter risingstarlife
- Start date
- 264
From AM Best:
OLDWICK, N.J., MAY 08, 2012
A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Lincoln Heritage Life Insurance Company (Lincoln Heritage) (Springfield, IL).
The negative outlook reflects an increased level of financial leverage within Lincoln Heritage, which is anticipated to result in dividend calls on the company. Future dividend requirements may be exacerbated in a rising interest rate environment. Moreover, as a result of increased new business, Lincoln Heritage has increased its reliance on reinsurance, resulting in higher reinsurance leverage over the last two years. Other negative rating factors include Lincoln Heritage's exposure to structured securities, which represents a substantial proportion of its statutory surplus, a limited business profile and dividend payments that have constrained surplus growth.
The rating affirmations reflect Lincoln Heritage's prominent market position in the final expense life insurance segment, consistent direct premium growth, a return to positive net overall results and a more than adequate risk-adjusted capitalization position. The company's effective lead generation program and affiliation with the Funeral Consumer Guardian Society has enabled Lincoln Heritage to be a prominent participant in the growing senior marketplace.
Factors that may lead to negative rating actions include deterioration in Lincoln Heritage's balance sheet quality, limited surplus growth, increasing financial leverage within the company and any further reliance on reinsurance. Factors that may lead to revising the outlook to stable include reduced leverage at Lincoln Heritage and an improvement in the quality of its capital through the retention of earnings.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: "Understanding BCAR for Life/Health Insurers" and "Evaluating Non-Insurance Ultimate Parents." Best's Credit Rating Methodology can be found at Ratings Methodology redirector.
OLDWICK, N.J., MAY 08, 2012
A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Lincoln Heritage Life Insurance Company (Lincoln Heritage) (Springfield, IL).
The negative outlook reflects an increased level of financial leverage within Lincoln Heritage, which is anticipated to result in dividend calls on the company. Future dividend requirements may be exacerbated in a rising interest rate environment. Moreover, as a result of increased new business, Lincoln Heritage has increased its reliance on reinsurance, resulting in higher reinsurance leverage over the last two years. Other negative rating factors include Lincoln Heritage's exposure to structured securities, which represents a substantial proportion of its statutory surplus, a limited business profile and dividend payments that have constrained surplus growth.
The rating affirmations reflect Lincoln Heritage's prominent market position in the final expense life insurance segment, consistent direct premium growth, a return to positive net overall results and a more than adequate risk-adjusted capitalization position. The company's effective lead generation program and affiliation with the Funeral Consumer Guardian Society has enabled Lincoln Heritage to be a prominent participant in the growing senior marketplace.
Factors that may lead to negative rating actions include deterioration in Lincoln Heritage's balance sheet quality, limited surplus growth, increasing financial leverage within the company and any further reliance on reinsurance. Factors that may lead to revising the outlook to stable include reduced leverage at Lincoln Heritage and an improvement in the quality of its capital through the retention of earnings.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: "Understanding BCAR for Life/Health Insurers" and "Evaluating Non-Insurance Ultimate Parents." Best's Credit Rating Methodology can be found at Ratings Methodology redirector.
- 3,764
downgrades are very common with lots of insurance companies. If there are further downgrades in the near future, then there might be something to worry about.
Matt defending LH? .. next thing you know he will be speaking positively about SL?
- 3,764
Matt defending LH? .. next thing you know he will be speaking positively about SL?
I know, hell has frozen over...Only reason why I am slightly defending LH is another Life insurance company which I use, Protective Life, recently had a slight down grade...These things happen...For what its worth, I cringed as I typed the last post!
- 8,707
rousemark said:Matt defending LH? .. next thing you know he will be speaking positively about SL?
What is not to defend. Down grades happen often. The release also says AM Best reaffirmed thier A- rating even with a negative Outlook that is still a good rating. And in this interest rate environment many carriers are having issues which is why you keep seeing carriers pull annuity contracts or 10 and 15 year term policies and other carriers are pulling 25 and 30 year term policies.
As has been stated many times this business is not easy and constantly changing, but this news release would not stop me from selling LH if I was actually selling LH.
It wouldn't concern me either .. But this was Matt and this was LH! ... If he starts saying nice things about SL and Greg, I'm heading for the bomb shelter.....
- 15,041
It is hard to use this against LH. Basically A.M. Best said they are growing too fast and there are some troubling trends in their investment portfolio. It seems A.M. Best wants LH to slow down growth so they aren't so reliant on reinsurance, increase their surplus in relation to their reserves and straighten out some investments.
The only way you could spin this as negative runs directly opposite what everyone says about them. Don't buy because they are selling too much insurance and might collapse under their own weight.
The only way you could spin this as negative runs directly opposite what everyone says about them. Don't buy because they are selling too much insurance and might collapse under their own weight.
