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A.M. Best Affirms Ratings of American Health and Life Insurance, Sears Life Insurance and Triton Insurance Companies

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A.M. Best has affirmed the financial strength ratings (FSR) of A- (Excellent) and the issuer credit ratings (ICR) of “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 the 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 increasing trends in premium for its core products, favorable capitalization, partially offset by the company’s continued exposure to downturns in the financial products marketplace, and parental dividend payments. 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. On Oct. 8, 2014, Citigroup, Inc. filed an SEC “Form S-1″ to begin the formal process for the potential initial public offering of OneMain Financial Holdings, Inc. (OneMain Financial), the parent of AHLIC, Sears Life and Triton.

A.M. Best notes that AHLIC’s top line premium growth increased in 2013 and the trend has continued so far in 2014, triggered by increasing average loan volumes. In 2012, AHLIC no longer sold real estate loan business, and as a result, is in the process of replacing this net revenue with personal loan business from OneMain Financial and CitiFinancial Canada, Citigroup Inc.’s consumer finance business. However, capital and surplus has remained relatively flat due to large dividend payments to Citigroup Inc., with the objective to right size its capital balance and maintain above average risk-based capital ratios. In addition to strong capital ratios, AHLIC reports consistently positive statutory operating results and continued sales of its core credit products and other specialty products.

The ratings of 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 Citi Assurance Services, Inc. (CAS) and its anticipated future declining trends in life/health premium activities and earnings.

The ratings of Triton, CAS’ property/casualty operation, recognize its historically strong operating performance, superior risk-adjusted capitalization, management’s expertise in consumer finance-oriented products and the business opportunities derived from its affiliates, OneMain Financial and CitiFinancial Canada.

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.

Positive rating movement is unlikely in the near to medium term. There could be negative pressure on the ratings and/or outlook should operating performance or risk-based capital measures materially deteriorate or if there is a view of a weakened financial position of its parent post spin-off from Citigroup Inc.

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

Key insurance criteria reports utilized:

  • Rating Members of Insurance Groups
  • Understanding BCAR for U.S. and Canadian Life/Health Insurers
  • Risk Management and the Rating Process for Insurance Companies
  • Evaluating Non-Insurance Ultimate Parents
  • Understanding BCAR for Property/Casualty Insurers

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit

Copyright (c) 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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