Time New York: Sun 05 Jul 15:05 pm  |  Save 15% on H&R Block Online


Aflac’s (AFL) Ratings Get Affirmed by AM Best, Outlook Stable


Ratings for Aflac Incorporated’s AFL subsidiaries have been confirmed by credit rating agency AM Best. It confirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "aa-" to Aflac Life Insurance Japan, Ltd. (Aflac Japan), American Family Life Assurance Company of Columbus (Omaha, NE), American Family Life Assurance Company of New York (Albany, NY) and Continental American Insurance Company (Omaha, NE). These companies represent the life/health insurance units of Aflac. The outlook of the ratings remains stable.

Notably, the credit rating giant also affirmed the Long-Term ICR of "a-" and all current Long-Term Issue Credit Ratings (Long-Term IR) of Aflac.

Rationale Behind the Ratings

The aforementioned ratings prove the company’s financial flexibility, which the credit rating agency categorized as strongest. The same also reflects its solid operating performance, robust business profile and a solid Enterprise risk management (ERM).

The company is consistently reporting risk-adjusted capitalization at the strongest level, per Best’s Capital Adequacy Ratio (BCAR). The company maintains strong risk-based capital levels in the United States and impressive solvency ratio in Japan.

Its performance got sufficient supporte from operating cash flow, high-quality investments and a sturdy liability structure. The company is committed to maintain its balance sheet strength and discreet capital management.

The investment team is actively managing the challenges induced by low interest rate environment and adverse forex.

The credit rating authority continues to check the effects of current economic volatility on its investment results and overall portfolio yields.

Aflac delivered solid operating results and profitability ratios in its different segments, in line with expectations. Its controlled distribution strategy is also a key contributor.

In order to combat the current situation, the company took several initiatives, some of which include sensitivity and stress testing of capital, and financial position, investment portfolio, etc.

Zacks Rank and Price Performance

Shares of this currently Zacks Rank #3 (Hold) company have lost 32.7% in a year’s time, wider than its industry’s decline of 32.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The share price fall is also wider than the stock depreciation of other companies in the same space, such as The Allstate Corporation ALL, CNA Financial Corporation CNA and The Hartford Financial Services Group, Inc. HIG, which have shed 2.4%, 25% and 29.1% of value, respectively, over the same time frame.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

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.

Zacks Investment Research
<-- 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.