Primerica’s (PRI - Free Report) long-term issuer credit rating (Long-Term ICR) of “a-” has been retained by AM Best. Concurrently, the rating giant reiterated the Financial Strength Rating of A+ (Superior) and the Long-Term ICR of “aa-” of Primerica Life Insurance Company and its affiliates, National Benefit Life Insurance Company and Primerica Life Insurance Company of Canada. Outlook of these ratings is stable.
The rating affirmation reflects Primerica Life’s position as one of the largest writers of term life insurance in the United States, sturdy balance sheet (solid risk-adjusted capitalization, adequate liquidity, strong financial leverage and interest coverage ratios), sustained solid operational results, favorable business profile and apt enterprise risk management.
AM Best noted that the company has been generating adequate GAAP and statutory net income, benefiting from reinsurance transaction and delivering increasing direct premiums. The company has also been benefiting from non-insurance revenues, which contribute significant portion of overall GAAP revenues through the sale of mutual funds and other savings products and distribution of other manufacturers’ life and annuity products.
However, focus on only term life products somewhat weighs on the positives.
Shares of Primerica have rallied 32% year to date, outperforming the industry’s rise of 18.1%. Strong market presence, solid performance of investment and savings products and effective capital deployment should help to drive share price higher. The stock carries a Zacks Rank #2 (Buy).
Rating affirmations or upgrades from credit rating agencies play an important role in retaining investor confidence as well as maintaining creditworthiness of a stock. Rating downgrades not only hamper business but also increase the cost of future debt issuances. We believe that such ratings will help Primerica retain investors’ trust and write more businesses going forward.
Other Stocks to Consider
Some other top-ranked insurers include Genworth Financial (GNW - Free Report) , Health Insurance Innovations (HIIQ - Free Report) and American Equity Investment Life Holding Company (AEL - Free Report) .
Genworth provides insurance and homeownership solutions in the United States and internationally. The company delivered positive surprise of 60.00% in the last reported quarter. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Health Insurance Innovations operates as a cloud-based technology platform and distributor of individual and family health insurance plans, and supplemental products in the United States. The company delivered positive surprise of 104.00% in the last reported quarter. The company sports a Zacks Rank #1.
American Equity Investment provides life insurance products and services in the United States. The company delivered positive surprise of 14.74% in the last reported quarter. The stock carries Zacks Rank #2.
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