CONTACTS:
FOR IMMEDIATE RELEASE
LONDON - JUNE 18, 2020 02:48 PM (EDT)
AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of C- (Weak) and the Long-Term Issuer Credit Rating of “ccc-” of Friday Health Plans of Colorado, Inc. (Friday Health of Colorado) (Alamosa, CO).
These Credit Ratings (ratings) reflect Friday Health of Colorado’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 (ERM).
The revision of the outlooks to positive is based on AM Best’s expectation of a continued trend of improvement of the balance sheet strength assessment. While capital and surplus was modest in 2019, Friday Health of Colorado’s parent has received capital commitments totaling $50 million in 2020, which are expected to be deployed to support Friday Health of Colorado’s business expansion and improve risk-adjusted capitalization. Furthermore, Friday Health of Colorado has entered into a three-year quota share reinsurance agreement with AXA, which will provide capital relief and for its current business, as well as for new business development.
Friday Health of Colorado has grown its business through a reinsurance agreement to assume business from New Mexico Health Connections effective Jan. 1, 2020, as well as from increased enrollment from its exchange business. However, underwriting results have fluctuated as the company struggles to gain scale and from investments in its operations. Friday Health of Colorado current business is mainly derived from individual exchange business in select geographies in Colorado and New Mexico. The company is working on market evaluations and licensing for geographic expansion of its business. While there have been improvement in operational and financial controls, the company’s ERM practices still are not developed and lag industry norms.
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 Guide to 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 credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.