AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings of “aa-” (Superior) of Central States Indemnity Co. of Omaha (CSI), and its subsidiary, CSI Life Insurance Company (CSI Life). The outlook of these Credit Ratings (ratings) is stable. Both companies are domiciled in Omaha, NE.

The ratings reflect CSI’s and CSI Life’s balance sheet strength, which AM Best assesses as strongest, as well as their adequate operating performance, limited business profile and appropriate enterprise risk management.

Additionally, CSI and CSI Life benefit from their very conservative underwriting leverage, above average liquidity position and the implicit support from their ultimate parent, Berkshire Hathaway Inc. (Berkshire) [NYSE: BRK A and BRK B] via investment management services, capital and risk management. CSI is a specialty insurance company, which provides credit card credit insurance and has fronting agreements with multiple insurers, in the aerospace and agricultural lines of business in several states.

These positive rating factors are offset by CSI’s elevated common stock leverage, which may bring volatility to the company’s surplus. CSI currently writes more non-credit insurance premiums on a gross basis compared with its long-standing credit insurance business. Most of CSI’s gross premiums written are related to long-term fronting arrangements.

CSI Life’s rating affirmations reflect its synergies with CSI. The ratings also reflect CSI Life’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and the explicit support provided by CSI, as well as the implicit support from Berkshire. Offsetting rating factors include CSI Life’s limited business profile and lack of product diversification.

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.

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

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