Partially offsetting these positive rating factors are Triton’s distribution dependence on OneMain Financial and CitiFinancial Canada and the underwriting sensitivity of its involuntary unemployment insurance business regarding initial unemployment claims filed in the United States and Canada. This is evidenced by Triton’s substantially lower underwriting profitability in 2008 and 2009 and its rebound in underwriting profitability in more recent years.While the companies are well positioned at their current rating levels, there could be negative pressure on the ratings and/or outlook should operating performance or risk-based capital measures materially deteriorate or any material change should occur in the rating of the banking parent. 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. Best’s Credit Rating Methodology can be found at http://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.
A.M. Best Co. has affirmed the financial strength ratings (FSR) of A- (Excellent) and issuer credit ratings (ICR) “a-” of American Health and Life Insurance Company (AHLIC) and Sears Life Insurance Company (Sears Life). Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a” of Triton Insurance Company (Triton). The outlook for all ratings is stable. These companies are ultimately owned by Citigroup Inc. [NYSE: C]. All companies are domiciled in Fort Worth, TX. AHLIC’s ratings reflect its stabilizing premium trends, along with its continued exposure to downturns in the financial products marketplace as well as A.M. Best’s view that the company has a reduced strategic value to its ultimate parent. Despite a one-time 2010 net premium increase resulting from a reinsurance transaction with a former affiliated company, National Benefit Life Insurance Company, A.M. Best notes that AHLIC’s top line premium growth has only improved marginally over the past year. This modest improvement in premium growth is due to improving loan volumes from OneMain Financial and CitiFinancial Canada, Citigroup Inc.’s consumer finance business. Moreover, AHLIC’s capital and surplus funds have declined over the past year as a result of extraordinary dividend payments to Citigroup Inc. AHLIC is included in Citi Holdings, which are businesses and portfolios of assets that Citigroup Inc. has determined are not central to its core business. Despite recent shareholder dividend payments, AHLIC maintains strong risk-adjusted capitalization ratios, consistently positive statutory operating results and continued sales of its core credit products. The ratings for Sears Life acknowledge its strong risk-adjusted capitalization and continuing operating profitability. These positive rating factors are offset by Sears Life’s nominal business position within CAS and its anticipated future declining trends in life/health premium activities and earnings performance. The ratings for Triton, CAS’ property/casualty operation, recognizes its historically strong operating performance and superior risk-adjusted, albeit declining, capitalization, which is largely due toits significant dividend payments to Citigroup, Inc. These positive factors are reflective of management’s expertise in consumer finance oriented products and Triton’s conservative underwriting leverage.