A.M. Best Assigns and Affirms Ratings of Ozark National Life Insurance Company; Revises Outlook...

OLDWICK, N.J. -- A.M. Best Co. has assigned an issuer credit rating (ICR) of "bbb+" and affirmed the financial strength rating (FSR) of B++ (Good) of Ozark National Life Insurance Company (Ozark National) (Kansas City, MO). The outlook for the FSR has been revised to positive from stable,

The rating affirmation reflects Ozark National's continued favorable level of capitalization on both a risk-adjusted and absolute basis, its continued positive earnings performance, which is driven by both favorable net underwriting income and net investment income trends, its favorable profitability ratios, a conservative investment strategy and positive trends in its conservation program resulting in renewal premium growth. An additional factor is Ozark National's focus on the traditional whole life market sector, which A.M. Best views as a lower risk creditworthy product line.

The positive outlook reflects Ozark National's various strategic initiatives to strengthen its premium growth trends going forward, including various agent recruitment and retention strategies. Over the past several years, the company has seen a reduction in both total agents and new agent recruitment, which has contributed to reduced new business production. Management attributes this to a focus on restructuring its distribution force and culling out unproductive agents to help build future growth. Beginning in 2007, Ozark National implemented numerous strategies to help grow and retain its agents and it expects this to have a favorable impact on new business growth beginning in late 2007 and 2008.

Going forward, A.M. Best will be closely monitoring the success of these changes, including management's ability to successfully recruit and retain productive new agents, as well as Ozark National's ability to substantively grow its core business through new business production and improved business retention. Given the unfavorable trend in premiums the past few years, A.M. Best will be looking for Ozark National to begin a trend of profitable premium growth in the future and to display its ability to prudently and effectively utilize its excess capital. Future rating movement will be largely based on management's ability to effectively and substantively reduce the negative premium trends through its recently implemented strategic plan.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.