AM Best Downgrades to the Credit of the Atlanta Life Insurance Company

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OLDWICK, N.J.BUSINESS WIRE) –Best of all has downgraded the Financial Strength Rating (FSR) to C +
(Marginal) from C ++ (Marginal) and the rating of the long-term issuer
(Long-term ICR) on "b-" from "b +" of the Atlanta Life Insurance Company
(ALIC) (Atlanta, GA). The outlook of the FSR has been changed to
negative from stable, while the outlook for the long-term ICR remains unchanged
Negative. ALIC is the life insurance member of Atlanta Life Financial
Group, Inc. (ALFG) and is the only active entity within the
Group.

The ratings reflect the balance sheet strength of ALIC, the AM Best
categorized as sufficient, as well as its poor operating performance
Limited business profile and weak risk management in the company.

The rating downgrades reflect the significant operating losses of ALIC
2017 and 2018 despite a one time favorable advantage due to the merger of
the two pension plans of the company that eliminated the pension liability
from the financial statements of ALIC once the plans have been merged. Despite
ALIC continued to be liable for the plan merger in the unlikely event
The plan assets were insufficient to finance the liabilities. On one
normalized basis, without one-off pension and one-time pension
Write-off of a reinsurance contract, operating losses are high
Expenses, adverse investment returns and the impact of a contracting
Balance sheet. The depreciation of the reinsurance contract, however, is
The operating result of AM Best is modest in terms of operating results
Assessment of weakness in the absence of an adequate risk control framework;
this must be addressed in the future by the new CFO
and Chief Executive Officer.

Despite maintaining a favorable risk-adjusted capital
Position, the overall balance sheet valuation continues to be emphasized
by a low amount of absolute capital due to a write-off of a
Intra-group receivables against ALFG, lack of liquidity, high
Reinsurance lever and bad cash flow test results. While
The balance sheet valuation continues to be reasonable and within the previous position of AM Best
Expectations are the operating cash flows of the company negative and AM
Best expected, if not the company's ambitious business plans
realized, future risk-adjusted capitalization levels are expected
declining over time, given the cost structure of the EU
Companies. The management has set up extensive business development plans
with focus on the acquisition of the group life insurance business of new and
existing carrier relationships, which promotes the marketing advantage
as an African-American reinsurance carrier. Best notes that were projected
The premium levels significantly exceed the historical standards and become a
To reach the challenge. As a result, the evaluation of the business profile of ALIC
remains very limited, with a lack of historical data quality
virtually no new business growth, limited market share and limited
Product diversification.

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