Press Release - DECEMBER 20, 2017

A.M. Best Affirms Credit Ratings of Independence Holding Company and Its Subsidiaries

 Craig Draghi
Financial Analyst
+1 908 439 2200, ext. 5164

Joseph Zazzera, MBA
+1 908 439 2200, ext. 5797

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

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


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.

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