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A.M. Best Affirms Credit Ratings of Legal & General Group Plc’s U.S. Operations

A.M. Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings of “aa-” of Banner Life Insurance Company (Banner Life) (Frederick, MD) and William Penn Life Insurance Company of New York (William Penn) (Valley Stream, NY). Banner Life and William Penn are referred to collectively as the Legal & General America Group (LGA) and represent the U.S. operations of the ultimate parent, Legal & General Group Plc (L&G), a worldwide insurance organization headquartered in the U.K. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect LGA’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management.

LGA’s business profile remains favorable, despite a heavy dependence upon the highly competitive and commoditized term life market, reflecting its very strong market position and well-recognized brand.

While profitable, A.M. Best expects LGA to experience volatility in its statutory accounting results due to high levels of statutory expense strain anticipated from new business production and the effects of periodic reserve financing transactions as it grows its pension risk transfer business. LGA’s favorable capitalization, in addition to parental support on an as needed basis, enhances LGA’s ability to grow its businesses.

Over the past few years, LGA implemented a strategic asset allocation program whereby the group reduced its allocation to publicly issued investment grade bonds and increased its allocations to high-yield and non-144A private placement bonds and direct commercial mortgage loans. While A.M. Best expects these asset classes to increase the overall yield of the invested asset portfolio and improve asset-liability duration matching, these assets classes are less liquid and expose the group to potential asset impairments.

This press release relates to Credit Ratings 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. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts:

David Marek
Financial Analyst
+1 908 439 2200, ext. 5340
david.marek@ambest.com

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