![]() Expenses related to its continuing expansion efforts could also dampen earnings. Best's belief that Sentinel Security Life will be challenged to improve its net operating performance and risk-adjusted capitalization going forward given the expense strains anticipated from projected new business growth, interest expense associated with its surplus note issuance and the continuing challenges of managing its increasing levels of interest-sensitive liabilities through the persistent low interest rate environment. Sentinel Security Life has incurred net operating losses over the past three years that were impacted by elevated expenses related to the company's expansion, expense strains associated with its new business growth and several one-time expenses. The company's unfavorable net operating performance during the past three years has contributed to lower-than-expected capital levels. The high level of growth has led to heightened reliance on reinsurance and has strained its risk-adjusted capital position. The negative outlook reflects weak operating results due to rapid growth in fixed annuity sales, declining spreads and costs related to product development and market expansion. The outlook for both ratings remains negative. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of "bbb" of Sentinel Security Life Insurance Company (Sentinel Security Life) (Salt Lake City, UT).
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