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FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 09, 2019 04:29 PM (EDT)
AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “ccc-” from “cc” and affirmed the Financial Strength Rating (FSR) of C- (Weak) of American Heartland Insurance Company (American Heartland). Concurrently, AM Best has affirmed the FSR of C++ (Marginal) and the Long-Term ICR of “b” of United Equitable Insurance Company (United Equitable), its separately rated affiliate. The outlook of these Credit Ratings (ratings) remains stable. Both companies are domiciled in Skokie, IL.
The ratings of American Heartland reflect its balance sheet strength, which AM Best categorizes as very weak, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).
The ratings of United Equitable reflect its balance sheet strength, which AM Best categorizes as weak, as well as its adequate operating performance, limited business profile and marginal ERM.
The Long-Term ICR upgrade reflects American Heartland’s recent improvement in risk-adjusted capitalization and key underwriting leverage measures, while maintaining low volatility in combined and operating ratios. Additionally, recent growth in policyholders’ surplus contributed to a five-year compound annual growth rate of 4.6%, while the ratios of loss reserves to policyholders’ surplus and loss reserves to net premiums earned each reached five-year lows. Cumulatively, these factors contributed to the improved baseline Long-Term ICR corresponding to the very weak balance sheet strength assessment.
United Equitable’s rating affirmations reflect the relative stability of its weak risk-adjusted capitalization and balance sheet strength, as well as the continued stability of key metrics of operating performance that align with an adequate operating performance assessment, such as its five-year average operating ratio, pre-tax return on revenue and total return on surplus.
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.
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