A.M. Best Affirms Credit Ratings of Independence Holding Company and Its Subsidiaries
December 20 2017 - 3:50PM
Business Wire
A.M. Best has affirmed the Financial Strength Rating
(FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings
(Long-Term ICR) of “a-” for the subsidiaries of Independence
Holding Company (collectively referred to as Independence
Holding Company Group) (headquartered in Stamford, CT)
[NYSE:IHC]. (See below for a detailed list of companies.)
Concurrently, A.M. Best has affirmed the Long-Term ICR of “bbb-” of
Independence Holding. The outlook for these Credit Ratings
(ratings) is stable.
The ratings reflect Independence Holding Company Group’s balance
sheet strength, which A.M. Best categorizes as strongest, as well
as its adequate operating performance, limited business profile and
adequate enterprise risk management. The group’s strongest level of
risk-adjusted capitalization is attributable to generally favorable
earnings over the past several years and significant shifts in the
product portfolio to less capital intensive lines of business. The
group had previously exited the major medical market and more
recently began its exit from stop-loss business in 2016 to focus on
specialty benefit products (including limited medical, short-term
medical, critical illness, non-subscriber occupational accident and
pet insurance) group life, disability and DBL (New York state
disability benefits law). While revenue from these new insurance
products remains significantly lower compared with the major
medical and medical stop-loss premium written in prior years, the
organization is focused on underwriting and pricing discipline for
continued profitable growth.
Offsetting rating factors include its limited business profile
considering the strategic shift the company is making to build its
competitive advantage in the remaining lines of business;
previously, the group had focused on building its expertise in its
stop-loss business. Competition in the supplemental health market
has intensified significantly, which may challenge its growth
within this market space. Although the group reported a substantial
gain on the sale of the stop loss division, on a statutory basis
the insurance companies reported losses in 2016 as a result of some
one-time items, including the write-off of goodwill which resulted
in a reclassification of unrealized losses to realized losses. The
effect of this transaction was neutral to surplus. Results have
improved since the sale through late 2017; however, the results are
still lower than in prior years as the group has made significant
advancements in replacing the stop-loss business.
The FSR A- (Excellent) and the Long-Term ICRs of “a-” has been
affirmed for the following members of the Independence Holding
Company Group:
- Independence American Insurance
Company
- Madison National Life Insurance
Company, Inc.
- Standard Security Life Insurance
Company of New York
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.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2017 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20171220006039/en/
A.M. BestCraig Draghi, +1 908 439 2200, ext.
5164Financial
Analystcraig.draghi@ambest.comorJoseph Zazzera, MBA,
+1 908 439 2200, ext.
5797Directorjoseph.zazzera@ambest.comorChristopher
Sharkey, +1 908 439 2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
+1 908 439 2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
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