AM Best rates Upstream Life Insurance Company in Dallas

AM Best has assigned a Financial Strength Rating of B- (Fair) and a Long-Term Issuer Credit Rating of 'bb-' (Fair) to Upstream Life Insurance Company, based in Dallas, TX. The outlook for these ratings is stable, reflecting the company's weak balance sheet strength and marginal operating performance. Despite profitable operating results in 2023 and early 2024, Upstream Life experienced significant losses from 2019 to 2022, leading to volatility in premium levels and operating earnings over the past five years. The company's risk-adjusted capitalization is assessed at a very strong level, as indicated by Best's Capital Adequacy Ratio (BCAR). However, this strength is countered by increased reinsurance leverage, reliance on unrated reinsurers, and limited financial flexibility. The governance structure for enterprise risk management has improved, but challenges remain due to a concentrated liability portfolio. Upstream Life's product diversification is limited, and it faces intense competition within the annuity market. The company has shown some consistency in results since the beginning of 2023, but the volatility in its financial metrics raises concerns about its long-term stability. AM Best expects the company's risk-adjusted capitalization to remain stable at current levels, despite the challenges it faces. Overall, while Upstream Life has made strides in improving its operational performance, the underlying issues related to its financial structure and market position present significant hurdles that could impact its future growth and stability.