Financial News

AM Best Revises Outlooks to Negative for SILAC Insurance Company

AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of SILAC Insurance Company (SILAC) (Salt Lake City, UT).

These Credit Ratings (ratings) reflect SILAC’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management (ERM).

The negative outlooks reflect the decline in quality of SILAC’s reinsurance counterparties and risk-adjusted capital due to increasing reinsurance leverage, as measured by Best’s Capital Adequacy Ratio (BCAR). SILAC has entered into several reinsurance agreements with unrated reinsurers and maintains relatively high reinsurance leverage to control capital strain. While SILAC’s capital and surplus has grown over the past year due to the retention of favorable earnings and capital contribution from investors, its risk-adjusted capitalization is assessed as weak. AM Best also notes the somewhat limited financial flexibility of SILAC should additional capital be needed to fund new growth or replenish capital due to investment impairments or recapture ceded business.

SILAC has consistently reported a favorable operating performance with net income reaching $41 million as of third-quarter 2023. The company’s earnings are primarily driven by investment spreads on SILAC’s fixed-indexed annuity (FIA) products. Earnings remain strong despite SILAC’s strategy to reduce sales in order to manage capital levels. SILAC’s business profile assessment reflects its favorable market position in annuity sales and its geographic diversification. SILAC offers a variety of FIA and multiyear guaranteed annuity products, which bodes well in the marketplace. AM Best continues to note SILAC’s high allocation to interest-sensitive business.

SILAC’s ERM primarily reflects the deteriorating quality of its reinsurance and heavy reliance on reinsurance to control capital strain. AM Best notes that SILAC has identified key risk categories related to its business and has established its risk appetite and tolerance levels for each category. While SILAC has controls in place to manage its reinsurance exposure, AM Best will continue to monitor the company’s ability to build out and expand its ERM program.

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

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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