AM Best Revises Issuer Credit Rating Outlook to Negative for Investors Heritage Life Insurance Company
AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and
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AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb+” (Good) of Investors Heritage Life Insurance Company (IHLIC) (Frankfort, KY). The outlook of the FSR is stable.
The ratings reflect IHLIC’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The negative outlook for the Long-Term ICR reflects a decline in IHLIC’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), to adequate from strong. The decline in risk-adjusted capitalization was driven by notable increases in non-equity security and interest rate risks. AM Best will continue to monitor IHLIC’s capital position as the organization continues to grow its liability profile. The negative outlook also reflects an increased exposure to private credit assets. While the private allocation is diversified and provides IHLIC with a strong yield, it is increased from historical levels but less than many of its peers. The organization strategically uses affiliated and unaffiliated reinsurance support to minimize the impact of new business strain.
IHLIC has made progress in improving its operating performance in 2025, as the company generated its first pre-tax operating gain since 2022. The improvement was largely driven by lower new sales strain from annuity sales; however, direct premium declined, resulting in lower commission expenses and a smaller increase in selling, general & administrative expenses year-over-year. While net investment income declined slightly, this was due to the statutory accounting of the company’s equity risk hedging program. AM Best observes positive earnings momentum from late 2025, through first-quarter 2026, resulting in strong growth of pre-tax operating earnings and net income.
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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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