AM Best Affirms Credit Ratings of AMEX Assurance Company

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of AMEX Assurance Company (AMEX Assurance) (Itasca, IL). AMEX Assurance is a wholly owned subsidiary of American Express Company (American Express) [NYSE: AXP]. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect AMEX Assurance’s balance sheet strength, which AM Best categorizes as very strong, as well as its very strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

AMEX Assurance’s very strong balance sheet strength reflects its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), conservative loss reserving practices and favorable development trends, as well as strong liquidity and underwriting leverage measures. Partially offsetting these factors is the constrained surplus growth resulting from the practice of returning the prior year’s net income to its parent in the form of stockholder dividends.

Operating results have outperformed the commercial casualty composite by a wide margin historically. In addition, AMEX Assurance has a favorable underwriting expense structure due to its low cost direct marketing distribution platform. Although AMEX Assurance’s business profile has a narrow scope as its emphasis is on travel-related and other ancillary products offered to American Express card members, it has an established reputation in the market with a strong distribution channel. The company’s ERM program includes oversight by the board of directors and comprehensive reinsurance protection.

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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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