AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of AMEX Assurance Company (AMEX Assurance) (Itasca, IL). The outlook of these Credit Ratings (ratings) is stable. AMEX Assurance is a wholly owned subsidiary of American Express Company (American Express) [NYSE: AXP].

The ratings reflect AMEX Assurance’s balance sheet strength, which AM Best assesses as very strong, as well as its very strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

AMEX Assurance’s very strong balance sheet strength reflects the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), consistently favorable loss reserve development, prudent underwriting leverage measures and a strong liquidity position that is supported by steady operating cashflows. Despite annual stockholder dividend obligations to the parent that match the prior year’s net income, the capital position of the company remains supportive of its overall balance sheet strength.

AMEX Assurance’s operating performance compares favorably with the commercial property composite average and benefits from a low expense cost structure. Although AMEX Assurance has a narrow business profile as its emphasis is on travel-related and other ancillary products, mostly offered to American Express card members, it has an established reputation in the market with a strong distribution channel. AM Best considers the ERM program as appropriate for the company’s risk profile, which focuses on enterprise-wide risk awareness that enhances AMEX Assurance’s brand attributes and supports the execution of its corporate strategies.

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