OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best has affirmed the financial strength rating of A
(Excellent) and the issuer credit rating of “a” of The Empire Life
Insurance Company (Empire Life) (Kingston, Ontario, Canada).
Concurrently, A.M. Best has affirmed the issue rating of “bbb+” on the
CAD 300 million 2.87% subordinated unsecured fixed/floating debentures
of Empire Life due May 31, 2023. Additionally, A.M. Best has affirmed
the issue rating of “bbb” on the CAD 149.5 million non-cumulative rate
reset Series 1 preferred shares. The outlook for each rating is stable.
Empire Life is a subsidiary of E-L Financial Corporation Limited (E-L
Financial), which operates as a publicly traded Canadian investment and
insurance holding company.
The ratings reflect Empire Life’s consistently profitable operations and
favorable risk-adjusted capital. This is supported by its continued
earnings growth and sustainable market presence in Canada with multiple
lines of business. Empire Life is among the 10 largest life insurance
companies in Canada (based on general and segregated fund assets),
although the company has a 6% market share or less in its three major
product lines. The company markets a broad range of life insurance and
investment products, employee benefit plans and financial services to
individuals, professionals and the small-to-medium group market through
multiple distribution channels. In addition, Empire Life maintains a
high quality and diverse set of assets that are enhanced by its growing
surplus position and hedging program.
Detracting from A.M. Best’s view of Empire Life is the significant
equity exposure in the company’s surplus account, segregated fund
products and its larger-than-peer equity holdings. The equity risk
products, including those with guaranteed minimum withdrawal benefits,
will continue to make Empire Life’s operating income potentially more
volatile, which is only partially reduced due to the instituted hedging
program. A.M. Best notes that Empire Life will continue to face
challenges in expanding its operations in its core business lines due to
the competition from larger Canadian life insurance companies. Similar
to other life insurers in Canada, Empire Life’s earnings also have been
negatively impacted by the continued low interest rate environment and
recent equity market volatility.
This press release relates to rating(s) that have been published on
A.M. 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 A.M. Best’s Recent
Rating Activity web page.
A.M. Best is the world’s oldest and most authoritative insurance
rating and information source. For more information, visit www.ambest.com.
Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS
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