OLDWICK, N.J.–(BUSINESS WIRE)–#insurance—AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of New Era Life Insurance Company, New Era Life Insurance Company of the Midwest and Philadelphia American Life Insurance Company, which are referred to as New Era Group (Houston, TX).
The ratings reflect New Era Group’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The revised outlooks to negative from stable reflect AM Best’s concerns over New Era Group’s elevated level of risk within its investment portfolio, including the heightened allocation to commercial mortgage loans, which is well above the industry average, and an above-average allocation to below investment grade bonds, although this has been declining.
New Era Group has a large commercial loan portfolio in Texas, New York and California, representing a significant exposure relative to its capital and surplus as of year-end 2025. Though the current exposure to commercial loans is large, New Era Group does have a long track record of managing this asset class. Partially mitigating factors include low loan-to-value ratios and very low foreclosure rates. The below investment grade portfolio has been decreasing since 2023 but still represents an increased exposure relative to capital and surplus, especially when considered with the current commercial loan allocation. AM Best also notes that New Era Group has had certain impairments in recent years, which has increased the volatility coming from realized and unrealized capital gains and losses.
New Era Group’s ratings recognize its consistently positive net gains from its operations, its core lines of business of Medicare supplement, underage 65 indemnity and fixed annuities and its continuing profitable niche in the senior marketplace. AM Best notes increased difficulties on the accident and health (A&H) line of business from increased health care costs, along with increased benefits and surrenders from the annuity line. New Era Group did see a return to positive net income in 2025 following breakeven results in 2024.
The business profile for New Era Group remains neutral with a strong customer-centric niche market strategy. Increased competition from larger annuity players places spread pressure on the annuity line but target gross spreads have been maintained. Product risk is lowered by shorter duration A&H products but the premium base is still concentrated mostly in Texas. ERM is appropriate for the size and scale of operations. AM Best will continue to monitor risk mitigation activities as well as the use of higher risk assets.
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 pertinent 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.
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