AM Best Upgrades Issuer Credit Rating of EquiTrust Life Insurance Company


OLDWICK, NJ–(BUSINESSWIRE)–AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” (Good) from “bbb” (Good) and affirmed the Financial Strength Rating (FSR) of B++ (Good) of EquiTrust Life Insurance Company (EquiTrust ) (Chicgao, IL). The outlook of the Long-Term ICR has been revised to stable from positive while the outlook of the FSR is stable.

The Credit Ratings (ratings) reflect EquiTrust’s balance sheet strength, which AM Best assesses as adequate, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The upgrade of the Long-Term ICR reflects a trend of EquitTrust’s increasing level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). EquiTrust previously had maintained a relatively low level of risk-adjusted capital compared with peers, primarily due to stockholder dividends paid to its parent. However, the company’s risk-adjusted capitalization has increased over the past few years due to a capital contribution from its parent, a lack of stockholder dividends and a trend of favorable operating results. The company also maintains a strong liquidity profile with strong operating cash flows, very good surrender protection on in-force annuity business and additional borrowing capacity through the Federal Home Loan Bank. Overall premiums have increased noticeably in recent periods, though there was a decline in 2021 due to lower annuity sales as a result of lower crediting rates in the low interest rate environment.

The company also continues to add new distribution relationships, which should foster additional sales growth over the near to medium term.

Partially offsetting these positive factors is the lack of audited financial statements from its parent and uncertainty regarding its dividend requirements. EquiTrust also maintains a relatively high level of reinsurance leverage with unrated insurance carriers, although this has been decreasing in recent periods. While the company has experienced favorable operating performance in recent periods, there has been some volatility in the past. However, interest rate spreads have remained favorable due to relatively steady investment yields despite pressures from the low interest rate environment. AM Best notes that the company maintains some concentration in structured securities, which currently comprises just approximately one-quarter of the general account investment portfolio. Partially mitigating this concern is that the investment portfolio is well-managed with good diversity by sector with only a modest amount of impairments during the past two years.

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 relevant 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

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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