Time New York: Thu 24 Aug 04:51 am  |  Save 15% on H&R Block Online

  
caticonslite_bm_alt

FBL Financial (FFG) and Units’ Ratings Upgraded by A.M. Best

Zacks

FBL Financial Group, Inc. FFG and its units recently received rating action from credit rating giant A.M. Best. The rating agency upgraded the Long-Term ICR to “bbb+” from “bbb” of FBL Financial. The rating outlook is revised to stable from positive.

At the same time, the rating agency upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a+” from “a” and reiterated Financial Strength Rating (FSR) of A (Excellent) of Farm Bureau Life Insurance Company (“FBL”), a unit of FBL Financial Group. The rating giant revised the affiliate’s Long-Term ICR outlook to stable from positive, with the FSR outlook remaining stable.

The rating upgrade came on the back of its solid risk-adjusted capitalization, strong operational performance, positive earnings trends and a capitalization profile of a very high quality.

However, continued spread contraction with a high percentage of annuity and universal life liabilities at guaranteed minimum crediting rates can partially offset the positives. This apart, absence of surrender charge protection in annuity liabilities and FBL’s highly concentrated business profile in the Midwest and Western geographic regions might lead to a rating downgrade.

Rating affirmations or upgrades from credit rating agencies play an important role in retaining investor confidence as well as in maintaining credit worthiness of a stock. On the other hand, rating downgrades not only damage business but also increase the cost of future debt issuances. We believe that such ratings will help FBL Financial to retain investor confidence and write more businesses going forward.

Zacks Rank and Share Price Movement

FBL Financial currently carries a Zacks Rank #3 (Hold). Shares of FBL Financial lost 6.24% since the release of first-quarter 2017 earnings results, underperforming the Multi line Insurance industry’s decline of 1.45%. However, we expect bottom-line growth on the back of higher net investment income and improved revenues as well as growing book of profitable business and robust capital position should help the stock to turn around in the near term.



Stocks to Consider

Some better-ranked stocks from the same space include Cigna Corporation CI, James River Group Holdings, Ltd. JRVR and Old Republic International Corporation ORI. Each of these stocks holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cigna Corp., which operates as a health services organization, offers insurance and related products and services in the United States and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 1.35%..

James River Group provides specialty insurance and reinsurance services in the United States. The company delivered positive surprises in all of the last four quarters with an average beat of 9.47%.

Old Republic International engages in the insurance underwriting and related services business primarily in the United States and Canada. The company delivered positive surprises in two of the last four quarters with an average beat of 11.37%.


5 Trades Could Profit "Big-League" from Trump Policies

If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.

Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.