OLDWICK: Global rating agency, AM Best has downgraded the credit rating of Armed Forces Insurance Exchange (AFIE) due to significant volatility in operating results and declining surplus, a news release said. However, the outlook for the rating has been revised to stable from negative.
AM Best has downgraded the Financial Strength Rating to B+ (Good) from B++ (Good) and the Long-Term Issuer Credit Rating to “bbb-” from “bbb” of Armed Forces Insurance Exchange (AFIE) (Leavenworth, KS).
The ratings reflect AFIE’s balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).
AFIE historically had an appropriate ERM program, but AM Best has called the effectiveness of this program into question due to significant volatility in operating results and declining surplus. The further surplus deterioration into 2019 and 2020 as a result of negative operating results supports AM Best’s assessment of AFIE’s ERM as marginal.