AM Best moves EquiTrust's outlook to stable, affirms B++

AM Best affirmed EquiTrust Life Insurance Company's ratings on Aug. 20 and revised the outlook to stable from positive. The financial strength rating stays at B++ (Good) and the long-term issuer credit rating stays at bbb+ (Good). The real change is in the outlook. A positive outlook had carried a reasonable possibility of an upgrade; a stable outlook takes that possibility away.

Outlooks are the part of a credit opinion that moves. A stable outlook tells counterparties that EquiTrust's balance sheet should hold its place in the Good band for the medium term, rather than climb toward Excellent. The positive outlook that AM Best retired had said an upgrade was reasonably possible. For anyone who uses AM Best opinions in capital treatment or credit terms, the loss of that upgrade possibility is the real news. The affirmation itself tells them nothing new.

The same day brought the opposite move for another insurer. AM Best shifted ELCO Mutual Life's outlook to positive, per Insurance Capital Daily's earlier coverage. At both companies the ratings themselves did not change; outlooks are where the agency adjusts its view between full reviews.

EquiTrust remains at B++ for financial strength and bbb+ for long-term credit. It is set to stay there until the next full review, or until the balance sheet changes enough to trigger another outlook move. The stable outlook is AM Best's way of saying that no actual rating change is in prospect.