Assessing Eagle Life Insurance Company’s Financial Strength and Ratings

When considering purchasing an annuity or life insurance policy, it is important to research the financial stability and ratings of the insurance company. This helps ensure they will be around to pay out future claims and benefits as promised.

One company to evaluate is Eagle Life Insurance Company. Below we will look at Eagle Life’s history, financial ratings, strengths and weaknesses, and what it means for consumers looking to buy insurance products from them.

Overview of Eagle Life Insurance Company

Eagle Life Insurance Company is a subsidiary of American Equity Investment Life Insurance Company, which specializes in annuities. Eagle Life was established in 2004 and is based in West Des Moines, Iowa.

The company focuses on selling fixed and fixed indexed annuities direct to consumers across the United States. They sell annuities through independent agents and do not have captive or career agents.

As of 2020, Eagle Life Insurance Company managed over $11 billion in assets and statutory reserves. They have consistently grown their business and expanded their offerings of fixed index annuities. Eagle Life today has annuity products designed for retirement income, legacy and estate planning.

Independent Ratings of Eagle Life’s Financial Strength

There are a few major independent firms that analyze and rate the financial strength of insurance companies like Eagle Life:

A.M. Best

For over 100 years, A.M. Best Company has been rating insurance carrier financial strength. They thoroughly research and evaluate a company’s balance sheet strength, operating performance, business profile and other factors.

A.M. Best ratings range from A++ (Superior) to F (In Liquidation). Eagle Life Insurance Company currently holds an A- (Excellent) rating from A.M. Best. The “A” rating signifies excellent financial strength and operating performance compared to industry peers.

According to A.M. Best, Eagle Life has a stable outlook and has maintained capital well above requirements. Their enterprise risk management capabilities are appropriate for their risk exposures.

Moody’s

Moody’s Investors Service performs in-depth analysis on insurance company financials, management, and risk profile. Their insurance ratings are forward-looking opinions on creditworthiness.

The Moody’s rating scale ranges from AAA (Exceptional) to C (Very Poor). Moody’s has assigned Eagle Life Insurance Company an A3 (Good) rating.

Moody’s report notes Eagle Life’s good market position, adequate profitability profile and management team. Their above-average financial leverage is offset by good interest coverage and asset liability management.

Fitch

Fitch Ratings provides insurer financial strength and credit ratings used widely by global capital markets. Ratings are based on quantitative and qualitative assessments of balance sheet strength, operating performance, capitalization, and business profile.

Fitch ratings range from AAA (Exceptionally Strong) to C (Distressed). Fitch has rated Eagle Life Insurance Company as A- (Strong).

Per Fitch’s analysis, Eagle Life’s capitalization and financial metrics are supportive of growth plans. Low interest rates remain a headwind. Their operating profitability, leverage and liquidity are considered adequate.

Strengths of Eagle Life Insurance Company

Digging deeper into the details and analysis of rating agencies, here are some notable strengths of Eagle Life Insurance Company:

• Strong Risk-Adjusted Capitalization – Capital ratios exceed required minimums which provides financial flexibility and supports growth.

• Extensive Annuity Expertise – Over 15 years experience successfully managing annuity business direct to consumer.

• Low-Cost Operations – Maintains low expense structure supporting operating performance.

• Effective Product Diversification – Wide range of fixed index annuities appeal to varied consumer segments.

• Strong Risk Management – Conservative investment portfolio, reinsurance use, and liquidity management.

• Stable Earnings – Consistent net income and profitability compared to competitors.

Eagle Life’s strengths in capital adequacy, profitability, risk management and long-term growth potential are reflected in the strong ratings from A.M. Best, Moody’s and Fitch.

Potential Weaknesses of Eagle Life

While Eagle Life’s financial ratings are strong overall, the rating agency reports do point out some potential weaknesses to note as well:

• Above-Average Leverage – Greater use of debt financing creates higher financial leverage than peers.

• Exposure to Low Interest Rates – Long period of low rates pressures profitability and requires closer ALM.

• Margin Pressure – Competitive market conditions squeeze product pricing and margins over time.

• Limited Business Diversity – Mainly focused on annuities through IMOs, lacks other products.

• Brand Recognition – Does not have the long history, scale and brand value of larger insurers.

However, rating agencies feel Eagle Life has adequate capital buffers and risk management to withstand these challenges relative to competitors.

What the Ratings Mean for Consumers

Based on the analysis, ratings and outlook from A.M. Best, Moody’s, Fitch and others, what does this mean for consumers considering purchasing annuities or life insurance from Eagle Life Insurance Company?

• Company should remain financially stable for the foreseeable future. Capital positions are supportive of growth plans.

• Very low risk of insolvency relative to insurance industry averages and competitors.

• Company likely to pay out future claims without issue. Rating agencies see no risks to contractual obligations.

• Eagle Life remains well-positioned to grow market share in competitive fixed index annuity marketplace.

• Conservative operations and risk management provide confidence in long-term stability.

Essentially, the strong ratings from A.M. Best, Moody’s and Fitch provide reassurance that Eagle Life Insurance Company has the financial strength and stability expected from a top insurance carrier.

While never risk-free, consumers can have a high degree of confidence that Eagle Life will fulfill its commitments to policy and annuity holders. The company’s financial position mitigates most risks typically associated with lesser-rated insurers.

The Bottom Line on Eagle Life Insurance Company

Founded in 2004, Eagle Life Insurance Company has rapidly grown to become a leading provider of fixed index annuities direct to consumers. They focus primarily on retirement and savings products.

Analysis of balance sheet strength, leverage, profitability, capitalization and other factors by ratings agencies A.M. Best, Moody’s and Fitch has resulted in Eagle Life receiving strong financial strength ratings between “A-” and “A3.”

These ratings indicate Eagle Life is financially positioned well compared to peers. Despite some modest weaknesses, Eagle Life has the capital adequacy, risk management expertise and operating performance to maintain stability.

For consumers looking carry annuities or life insurance from Eagle Life, their ratings provide reassurance of financial standing. Overall, the ratings reflect favorably on the company and reinforce their ability to meet obligations to policy and annuity holders.