AM Best Comments on the Credit Ratings of Prosperity Life Group's Subsidiaries Following Merger Announcement

AM Best Comments on the Credit Ratings of Prosperity Life Group's Subsidiaries Following Merger Announcement.

AM Best has commented that the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of 'a-' (Excellent) of Prosperity Life Group's subsidiaries, Shenandoah Life Insurance Company (Roanoke, VA), SBLI USA Life Insurance, Inc. (New York, NY) , Prosperity Life Assurance Limited (PLAL) (Bermuda) and S.USA Life Insurance Company, Inc. (Phoenix, AZ) remain unchanged following the announcement that a definitive merger agreement has been reached whereby S.USA Life Insurance Company, Inc. (S.USA), a subsidiary of Prosperity Life Group and PHG Merger Inc. (a subsidiary of S.USA), will acquire National Western Life Group, Inc. (National Western) in an all-cash transaction valued at approximately $1.9 billion. The outlook of these Credit Ratings (ratings) will remain stable.

The transaction is expected to add additional scale, a diverse liabilities profile and strong capitalization, with continued investment in infrastructure, while preserving liquidity. The acquisition represents a continued strategy of significant expansion of Prosperity Life Group's insurance business. The merger will be funded through a combination of cash from internal sources, a capital commitment from affiliates of Elliott Investment Management L.P., its parent and additional borrowing under existing facilities.

The merger is expected to close in the first half of 2024, subject to regulatory approvals. There is a plan to re-domesticate National Western Life Insurance Company to Arizona (the domestic state of S.USA) from Colorado, which will be a condition to the closing of the transaction. Ozark National Life Insurance Company, a subsidiary of National Western, will remain domiciled in Missouri. AM Best will continue to closely monitor the transaction and the impact to the operating insurance entities under Prosperity Life Group.

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.