AM Best Revises Outlooks to Negative for Kansas City Life Insurance Company; Affirms Credit Ratings

AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” of Kansas City Life Insurance Company (Kansas City Life). Concurrently, AM Best has revised the outlooks to negative from stable and affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Grange Life Insurance Company (Grange Life) (Columbus, OH).

In addition, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Sunset Life Insurance Company of America (Sunset Life), as well as Kansas City Life’s final expense life insurance subsidiary, Old American Insurance Company (Old American). The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Kansas City, MO unless otherwise specified. All companies are wholly owned subsidiaries of Kansas City Life.

The ratings reflect Kansas City Life’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The change in outlook for Kansas City Life is due to a decline in the company’s capital and surplus and its risk-adjusted capital. This is partially due to a recent acquisition, but also is affected by recent declines in the company’s operating performance, which has failed to produce sufficient organic capital and surplus growth. Offsetting rating factors include its business profile, which is aided by a diverse set of product offerings with a focus on ordinary life, and the quality of capital, which is unencumbered by surplus notes, other forms of debt or captives.

The ratings of Grange Life reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate ERM.

The negative outlook for Grange Life is due to the company’s marginal operating performance, which has produced negative returns and impacted the company’s capital and surplus and reduced AM Best’s assessment of its balance sheet strength. Offsetting factors include risk-adjusted capital, which has declined from an assessment of strongest but still maintains a score of very strong.

The ratings of Sunset Life and Old American reflect the companies’ balance sheet strength, which AM Best categorizes as very strong, as well as their adequate operating performance, limited business profile and appropriate ERM.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency and information provider with an exclusive focus on the insurance industry. Visit www.ambest.com for more information.

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