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A.M. Best Affirms Credit Ratings of The Penn Mutual Life Insurance Company and Its Subsidiaries

HORSHAM, Pa. -  March 23, 2018 — A.M. Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “aa-” of The Penn Mutual Life Insurance Company (Penn Mutual Life) (Horsham, PA) and its wholly owned subsidiary, The Penn Insurance and Annuity Company (Wilmington, DE) (collectively referred to as Penn Mutual). The outlook of Penn Mutual’s Credit Ratings (ratings) is stable. Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” of Vantis Life Insurance Company (Vantis Life) (Windsor, CT) and Vantis Life Insurance Company of New York (Brewster, NY) (collectively referred to as Vantis). The outlook of the FSR is stable, while the outlook of the Long-Term ICR is positive. A.M. Best also has affirmed the Long-Term Issue Credit Ratings (Long-Term IRs) of “a” on the $200 million 6.65% surplus notes due 2034 and the $200 million 7.625% surplus notes due 2040, issued by Penn Mutual Life. The outlook of the Long-Term IRs is stable.

The ratings of Penn Mutual reflect its balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The rating affirmations of Penn Mutual reflect its maintenance of the strong level of risk-adjusted capitalization and its well-managed and diverse investment portfolio. Additionally, the company has demonstrated favorable liquidity and financial flexibility. Penn Mutual’s favorable business profile is anchored by its position as a key mutual insurer operating primarily in the life and annuity space, targeting the affluent market. Penn Mutual’s GAAP and statutory operating results have benefited historically from the diversity of its products and distribution, although new business strain has impacted statutory profitability in recent years. Additionally, fee income derived from its broker/dealer operations has added increasingly to operating profitability. A.M. Best notes that Penn Mutual has made significant strides with strategic innovation and technological expertise throughout the organization, further enhancing its business profile.

Vantis’ ratings reflect its balance sheet strength, which A.M. Best categorizes as strong, as well as its adequate operating performance, adequate business profile and appropriate ERM.

The ratings also reflect A.M. Best’s view that Vantis benefits from its new position as a subsidiary of Penn Mutual, a larger and financially stronger mutual insurance organization. However, to date, Vantis has not been fully integrated into the overall Penn Mutual operation. The positive outlooks assigned to Vantis’ Long-Term ICRs reflect A.M. Best’s belief that the company’s ratings could be enhanced further as it integrates into the Penn Mutual organization.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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