Press Release - SEPTEMBER 06, 2019

AM Best Revises Outlooks to Positive for Heartland Fidelity Insurance Company

 David Mitchell
Senior Financial Analyst
+1 908 439 2200, ext. 5556

Bridget Maehr
Associate Director
+1 908 439 2200, ext. 5321

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Heartland Fidelity Insurance Company (Heartland) (Washington, D.C.).

The Credit Ratings (ratings) reflect Heartland’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The positive outlooks are based on Heartland’s improved underwriting and operating results over the past three years and projected favorable outcome in 2019. The company has exhibited consistently profitable risk revenue development over the period in its two major lines of business, pharmacy and vision care. The company’s reliance on assumptive reinsurance for growth has flattened, and the increase in direct premiums speaks of the improvements achieved through its distribution force. The improvements in operating performance reflect double-digit return on revenue and return on equity scores that generally have grown over the past four years.

The ratings also recognize Heartland’s high risk-adjusted capitalization, which has led to its balance sheet strength assessment of strongest over the past few years. The ratings also recognize the company’s efforts to strengthen ERM by putting into place the policies, procedures and management oversight needed to solidify the organization’s risk profile.

Partially offsetting these strengths is the concentration of sales in New Jersey, and from a business profile perspective, operation remains concentrated in pharmacy and vision care. There also is a strong reliance on its Pharmacy Benefits Manager (under common ownership), without which the company’s growth and business diversification could be limited.

This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.

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AMB# Company Name
076359 Heartland Fidelity Insurance Company