A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating of “a+” of AMEX Assurance Company (AMEX Assurance) (Chicago, IL). AMEX Assurance is a wholly owned subsidiary of American Express Company (American Express) (New York, NY) [NYSE: AXP]. The outlook for both ratings is stable. The ratings reflect AMEX Assurance’s strong capital position and trend of operating income generated by providing insurance products to American Express card members. Offsetting these positive rating factors are AMEX Assurance’s limited business scope as the majority of its products primarily are confined to American Express card members and lack growth in policyholders’ surplus as demonstrated over the past five years. This is due to AMEX Assurance prior years’ net income being returned to American Express through stockholder dividends. AMEX Assurance’s strong capital position is reflective of its conservative investment risk profile, generally favorable reserve development and favorable operating results driven by solid profit margins. The favorable operating results reflect the company’s low cost, direct marketing strategy and its emphasis on travel-related and other ancillary insurance coverages primarily offered to American Express card members. As AMEX Assurance’s stable outlook indicates, its ratings and outlook are expected to be maintained over the near term. However, there may be future negative rating actions if there is a decline in AMEX Assurance’s premium writings caused by a global economic downturn or terrorist event, which results in a sustained reversal in operating profitability and/or an increased dividend requirement from American Express that results in a material decline in its capitalization. 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 www.ambest.com/ratings/methodology. 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 © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.