A.M. Best Affirms Ratings Of American National Insurance Company And Its Subsidiaries

A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit rating (ICR) of “a+” of American National Insurance Company (ANICO) (NASDAQ: ANAT). Additionally, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a” of American National Life Insurance Company of Texas, Garden State Life Insurance Company (League City, TX), Standard Life and Accident Insurance Company, American National Life Insurance Company of New York (Glenmont, NY) and Farm Family Life Insurance Company (Glenmont, NY), all subsidiaries of ANICO. The outlook for all ratings is stable. The above companies are headquartered in Galveston, TX, unless otherwise specified.

The rating affirmations of ANICO are based on its good consolidated risk-adjusted capitalization, higher GAAP and statutory earnings reflecting improving results in the property/casualty segment, and diverse product offerings. The ratings also reflect growth in ANICO's admitted and invested assets, driven primarily by its fixed annuity-based asset expansion and, incrementally, by growth in its life insurance business. ANICO benefits from revenue and income from diverse sources, which include its life/health and property/casualty affiliates, as well as from its non-insurance affiliates. A.M. Best also notes that the financial leverage at ANICO remains modest relative to its consolidated equity level.

Partially offsetting these positive rating factors is ANICO's high exposure to interest-sensitive liabilities, variability in GAAP and statutory earnings over the past, high exposure to mortgage loans and real estate holdings and the challenges of optimizing the company's returns on a sustained basis.

The ratings of the life insurance subsidiaries of ANICO acknowledge their improved operating trends, strong risk-adjusted capitalization and continuing contribution to ANICO's consolidated results. Partially offsetting these positive rating factors are the life subsidiaries' somewhat fluctuating premiums and earnings trends, limited business profiles and the challenges to grow their business lines.

A.M. Best believes ANICO is well positioned at its current ratings. Key rating factors that could result in negative rating actions include a decrease in risk-adjusted capitalization, profitability below A.M. Best's expectations and further concentration in interest-sensitive products.

In addition, A.M. Best has affirmed the FSRs of A (Excellent) and ICR of “a” of American National Property and Casualty Company (ANPAC) (Springfield, MO), its subsidiaries, American National General Insurance Company (Springfield, MO) and American National County Mutual Insurance Company (Galveston, TX) and its separately-rated subsidiaries, American National Lloyds Insurance Company (Galveston, TX) and Pacific Property and Casualty Company (San Jose, CA). A.M. Best has also affirmed the FSR of A- (Excellent) and ICR of “a-” of ANPAC’s separately-rated subsidiary, ANPAC Louisiana Insurance Company (Mandeville, LA). The outlook for the ratings is stable.

Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a” of Farm Family Casualty Insurance Company (Farm Family) and United Farm Family Insurance Company. The outlook for the ratings is stable. These companies are domiciled in Glenmont, NY.

The members of the ANPAC and Farm Family groups of companies are all property/casualty subsidiaries of ultimate parent ANICO. The ratings also consider the support provided by ANICO, as well as the synergies generated amongst and between the groups and their parent.

Negative rating actions for the property and casualty subsidiaries could occur if there were a sudden unexpected and material decline in risk-adjusted capitalization, a sustained deterioration in operating performance or diminished liquidity measures.

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. Additional key criteria utilized include: “Catastrophe Analysis in A.M. Best Ratings”; “Rating Members of Insurance Groups”; “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; and “Understanding BCAR for Life/Health Insurers.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com

Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Copyright Business Wire 2010

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