Press Release - JUNE 07, 2019
AM Best Upgrades Issuer Credit Rating of Friday Health Plans of Colorado, Inc.
FOR IMMEDIATE RELEASE
OLDWICK - JUNE 07, 2019
The ratings reflect Friday Health’s balance sheet strength, which AM Best categorizes as very weak, as well as its marginal operating performance, limited business profile and weak enterprise risk management.
Friday Health’s absolute capital and quality of capital improved through the conversion of $3.2 million of surplus notes to paid-in capital and additional capital contributions of $2 million. Risk-adjusted capitalization at year-end 2018 was above statutory minimum, due in part to a decline in revenue as well as the aforementioned increase in capital.
Following years of net losses, Friday Health reported net income for 2018 driven by favorable prior year risk adjustment payment for Affordable Care Act members and rate increases on non-performing group business.
The upgrade of the Long-Term ICR reflects the improvement of risk-adjusted capitalization and the company’s continued focus on profitability and operational improvements. However, due to lack of size and scale, as well as deficiencies in its enterprise risk management practices, Friday Health could exhibit volatility in its financial performance, as seen in prior years’ results.
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