NWLIA National Western Life Insurance Company (MM)

A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and has assigned an issuer credit rating (ICR) of "a-" to National Western Life Insurance Company (NASDAQ: NWLIA) (Denver, CO). All ratings have a stable outlook. These rating actions reflect NWLIA's favorable risk-adjusted capitalization, consistently profitable operating results, a good asset-liability management program and its sustained life insurance marketing presence in Latin America. NWLIA's strong risk-adjusted capitalization has been enhanced by consistent statutory and GAAP earnings, particularly within its annuity segment. The company's net premium growth has been primarily driven by its equity-indexed annuity segment. While NWLIA's rapid annuity growth over the past two years has resulted in significant interest rate risks, the company's strong risk-adjusted capitalization, surrender charge protection and market value adjustment features somewhat mitigate these risks. In noting NWLIA's significant growth in equity-indexed annuities, A.M. Best acknowledges its prudent product design and customer profiles, effective hedging programs and active market conduct and compliance programs. However, A.M. Best remains cautious over the potential declines in the industry's future equity-indexed annuity sales and its impact on statutory earnings given the increasing due diligence demanded to comply with the prevailing heightened regulatory environment. For the period ending December 31, 2004, NWLIA reported total shareholders' equity of $808.7 million. For Best's Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit http://www.ambest.com/lh. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.