Sammons Financial Group Inc.

The stable outlook reflects our expectation that Sammons will maintain its strong competitive position with its well-balanced product portfolio vis-à-vis peers', as well as its proven ability to generate profitable growth in all of its key business segments. We also expect it to maintain capital adequacy above 'AA' confidence level per our RBC model. We could lower our ratings in the next 12-24 months if Sammons experiences a significant loss of market position, brand strength, or geographic diversity that ultimately would hurt its competitive edge, or if statutory capital adequacy falls significantly below the 'AA' rating level per our RBC model. We are unlikely to raise our ratings in the next 24 months, but we could, if Sammons gains a

...Sammons has stable operating performance versus peers. Sammons Financial Group Inc. has maintained a well-balanced product portfolio while historically keeping steady operating performance as shown by a return on assets (ROA) of about 70 basis points (bps) to 90 bps over 2017-2019 on statutory accounting basis. We expect the company to maintain ROA close to 80 bps over next two to three years, supported by growth in premiums and partially offset by lower investment spread. Sammons is committed to maintaining capital at '##' confidence level per our capital model. Our risk-based capital (RBC) model suggests Sammons will be able to maintain very strong capital through 2022, based on stable earnings' generation without an aggressive investment policy. Conservative and well-diversified investment portfolio increases company's resilience to economic stress. More than 75% of Sammons' fixed income securities belong to National Assn. of Insurance Commissioners (NAIC) class 1, with another 20% in...

Full Report