AM Best Affirms Credit Ratings of Florida Combined Life Insurance Company, Inc.

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of Florida Combined Life Insurance Company, Inc. (FCL) (Jacksonville, FL). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect FCL’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM). The ratings also reflect the company’s strategic importance to GuideWell Mutual Holding Corporation (GuideWell) and recognize the inherent benefits FCL derives as a subsidiary of GuideWell.

FCL’s balance sheet strength is underpinned by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, the balance sheet strength assessment considers the company’s good liquidity measures, offset by significant reinsurance dependence as 100% of the policies are reinsured to an external company.

FCL’s operating performance has been volatile over the most recent five-year period, but improved in 2019. Higher operating losses in 2018 primarily were driven by the health insurer fee, as well as a one-time tax payment on FCL’s distribution of its share of Life and Specialty Ventures, LLC. AM Best expects prospective operating performance to remain volatile due to the company’s business model. Since a significant portion of the business is ceded, the company’s primary source of earnings are driven by investment income, which has been impacted by lower bond investment yields.

GuideWell has a mature and comprehensive ERM program that has been operational for over a decade and includes the operations of FCL. ERM is embedded in the corporate culture through strong and effective governance. Standard processes and tools support risk management across the organization.

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, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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