JANUARY 24, 2018 10:55 AM (EST)
A.M. Best Upgrades Credit Ratings of USHEALTH Group, Inc.’s Subsidiaries
FOR IMMEDIATE RELEASE
OLDWICK - JANUARY 24, 2018 10:55 AM (EST)
The ratings reflect USHEALTH Group’s balance sheet strength, which A.M. Best categorizes as adequate, as well as its strong operating performance, limited business profile and adequate enterprise risk management.
The rating upgrades reflect USHEALTH Group’s positive earnings trends over the past several years in support of favorable absolute capital growth and significant revenue growth attributed to an expanding captive sales force. In response to the Patient Protection and Affordable Care Act (ACA), USHEALTH Group gradually transitioned its business portfolio to supplemental health and ancillary products, which are not directly regulated by the law. These products have proven to be more profitable than previously offered traditional health policies. Additionally, USHEALTH Group has improved its loss ratio in recent years due to more stringent underwriting guidelines and rate increases. In addition, the group has focused on growing its captive agent force, which has driven sales growth substantially with net premiums written reporting a five-year compound annual growth rate of 22.9% in 2016.
Offsetting rating factors include a lack of product and geographic diversification, as the group’s premium is derived principally from a single product concept, and approximately one-half is derived from three states. Additionally, the USHEALTH Group operates in an increasingly competitive market that is tied closely to the regulatory environment.
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