A.M. Best has upgraded the financial strength rating of Freedom Life Insurance Company of America and National Foundation Life Insurance from B+ (good) to B++ (good).
Both firms, which are subsidiaries of USHEALTH and are collectively known as USHEALTH Group, also saw their long-term issuer credit rating improve from “bbb-” to “bbb”.
The outlooks of these ratings have been revised from positive to stable.
According to the ratings agency, USHEALTH Group’s ratings are reflective of its adequate balance sheet strength, its strong operating performance, limited business profile and adequate enterprise risk management.
In response to the Patient Protection and Affordable Care Act (ACA) USHEALTH Group altered its business profile to supplemental health and ancillary products which has proven to be a profitable move and has positively affected its ratings.
In addition, the rating improvements reflect USHEALTH Group’s positive earning trends over several years in support of favourable absolute capital growth and significant revenue growth attributed to an expanding captive sales force.
The positive rating actions are also due to the group’s improved loss ratio in recent years and its focus on growing its captive agent force, which has seen a substantial improvement in sales growth.
Offsetting the positive rating factors is the increasingly competitive market that is closely linked to the regulatory environment and the lack of product and geographic diversification.
The group’s premium is obtained primarily from a single product concept, and approximately one-half is derived from three states.
