Sep 24, 2025

Group, Inc. (W&SFG) and its operating subsidiaries, including the 'AA' Insurer Financial Strength (IFS) ratings for its insurance subsidiaries. Fitch has also affirmed W&SFG's 'AA-' Long-Term Issuer Default (IDR), 'A+' senior debt ratings and Western-Southern Global Funding's Longe-Term Senior Secured (FABN Program) at 'AA'. The Rating Outlook for W&SFG and its operating subsidiaries is Stable. The rating affirmations reflect W&SFG's extremely strong capitalization, favorable company profile with solid diversification, and its history of stable earnings, offset somewhat by the company's surplus exposure to equity securities. Key Rating Drivers Extremely Strong Capitalization: W&SFG's insurance subsidiaries remain extremely strongly capitalized, and its capitalization remains a key driver of the rating in Fitch's view. The company's capital quality is also above average relative to similarly rated peers. This is due to W&SFG's low leverage metrics, lack of captives and no utilization of third-party reinsurance. Exceptionally strong capitalization is supported by a Prism capital model score of 'Extremely Strong' at YE 2024. Favorable Company Profile: W&SFG's company profile is favorable relative to the broader North American life insurance industry, driven by its favorable business risk profile and operating scale. W&SFG's company profile continues to reflect its lower-risk products and steady market position across its core product offerings. W&SFG's sales of interest-sensitive annuities, primarily consisting of fixed-rate deferred, remained elevated, as markets have remained favorable. The company's Gerber Life direct to consumer (DTC) sales continued to grow, helping to further diversify W&SFG's liability profile. Stable Earnings: W&SFG's financial performance steadied in 2024, with an ROE of 7.0%. Fitch considers the company's performance moderate compared to the broader industry and relatively stable. Earnings are driven by a moderate exposure to interest-sensitive liabilities as well as strong earnings in the life and asset management segment. Surplus Exposure to Equity Securities: Fitch considers W&SFG's surplus exposure to equity securities above average relative to the industry. However, Fitch believes the company's overall asset risk is line with its highly rated peers. Investments are comprised primarily of U.S. investment-grade corporates, with a moderately overweight exposure to commercial mortgage loans. Equity exposure is primarily used to back excess surplus, and the position has posted above-average returns since inception. Asset/Liability Management: Asset/liability and liquidity management are very strong. Cash flow testing results demonstrate significantly positive reserve margins across all scenarios and major product lines. The duration mismatch remains consistent with the rating category. Disintermediation risk is considered modest given a conservative liability profile, and the company's recent annuity sales are well matched, which mitigates the risk associated with a shock-lapse scenario. Narrowed Notching: Fitch currently maintains narrower notching between W&SFG's holding company IDR and its operating subsidiaries' IFS ratings. This primarily reflects the company's ample holding company liquidity and low financial leverage. W&SFG maintains ample holding company assets of over $600 million-most of which is liquid and could cover principal repayment of its senior unsecured notes. Fitch views maintenance of holding company liquidity as key to the current narrower notching of the IDR. This approach allows W&SFG's senior debt to be rated two notches below the company's IFS ratings, compared with the standard three notches based on Fitch's criteria. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade --A shift in the business profile that would lead to a departure from the company's conservative risk profile through a more pronounced shift to interest-sensitive annuity offerings or other products outside of the company's core competencies; --Sustained deterioration in the company's capitalization metrics through a reported consolidated RBC ratio consistently below 400% and a Prism capital model score below 'Extremely Strong'. Factors that Could Result in Standard Notching of the Holding Company Ratings --Holding company liquid assets below 75% of holding company debt obligations and sustained financial leverage above 15%. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade --Improvement in the business profile score to 'aa' level, which may include an increase in operating scale, maintaining a top-tier competitive position in the company's core life insurance segments and lower relative exposure to interest-sensitive liabilities; --The continued maintenance of extremely strong capitalization metrics, as measured by an RBC ratio consistently exceeding 450%; --'Extremely Strong' Prism capital model outcome; --Financial leverage ratio below 10%. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores RATING ACTIONS Entity / Debt Rating Prior Columbus Life Insurance Company LT IFS AA Affirmed AA Western-Southern Life Assurance Company LT IFS AA Affirmed AA The Western and Southern Life Insurance Company LT IDR AA- Affirmed AA- LT IFS AA Affirmed AA subordinated LT A+ Affirmed A+ Western & Southern Financial Group, Inc. LT IDR AA- Affirmed AA- senior unsecured LT A+ Affirmed A+ Western-Southern Global Funding senior secured LT AA Affirmed AA National Integrity Life Insurance Company LT IFS AA Affirmed AA Previous Page of 10 rows 20 rows 50 rows 100 rows 500 rows Next Loading... VIEW ADDITIONAL RATING DETAILS Additional information is available on www.fitchratings.com PARTICIPATION STATUS The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure. APPLICABLE CRITERIA Insurance Rating Criteria (pub. 04 Mar 2024) (including rating assumption sensitivity) APPLICABLE MODELS Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s). Prism U.S. Life Insurance Capital Model, v1.3.5-2024 ( ADDITIONAL DISCLOSURES Dodd-Frank Rating Information Disclosure Form Solicitation Status Endorsement Policy ENDORSEMENT STATUS Columbus Life Insurance Company EU Endorsed, UK Endorsed Integrity Life Insurance Company EU Endorsed, UK Endorsed National Integrity Life Insurance Company EU Endorsed, UK Endorsed The Lafayette Life Insurance Company EU Endorsed, UK Endorsed The Western and Southern Life Insurance Company EU Endorsed, UK Endorsed Western & Southern Financial Group, Inc. EU Endorsed, UK Endorsed Western-Southern Global Funding EU Endorsed, UK Endorsed Western-Southern Life Assurance Company EU Endorsed, UK Endorsed DISCLAIMER & DISCLOSURES All Fitch Ratings (Fitch) credit ratings are subject to certain limitations and disclaimers. Please read these limitations and disclaimers by following this link: https://www.fitchratings.com/understandingcreditratings . 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