National Western Life Insurance Co' earnings and return on assets have stabilized despite scaled-back international operations.



  • NWLIC's earnings and return on assets have stabilized despite scaled-back international operations.
  • We are revising our outlook on NWLIC to stable from negative and affirming our ratings.
  • The stable outlook reflects our expectation that the company will maintain extremely strong capitalization and positive earnings.


  • NWLIC's corporate strategy will:
    remain relatively consistent with prior years' and not disrupt our base-case 
    assumptions despite recent company decisions to cease new business in certain 
    international markets, and supported by recurring premiums and investment 
    income. Our opinion is further supported by NWLIC's extremely strong capital 
    adequacy, which we expect to remain beyond our two-year rating horizon.

    We do not expect to raise the ratings in the next 12-24 months because of the 
    company's earnings concentration in the highly commoditized U.S. annuities 
    market and its lack of scale and competitive position in the domestic life 
    insurance market. In our base-case projections, we expect the company's 
    capital to remain redundant at the 'AAA' level based on our risk-based capital 
    model, supported by continued positive retained earnings, a relatively 
    conservative investment portfolio, and no significant strains on capital.