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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 04, 2010 12:00 AM (EDT)
A.M. Best Co. has downgraded the financial strength rating to B++ (Good) from A- (Excellent) and issuer credit rating to "bbb+" from "a-" of Bupa Insurance Company (Miami, FL). The outlook has been revised to stable from negative.
Bupa Insurance Company is the primary operating entity for Bupa Latin America and the Caribbean, a divisional member of the Bupa group of companies, an international healthcare company.
The downgrading of the ratings for Bupa Insurance Company reflects the decline in its level of risked-based capitalization and volatility of its operating results. Over the last five years, the company's risked-based capitalization has been trending downward. This decline is due to multiple factors, including, negative underwriting and net income results in 2006 and 2007, reserve strengthening in 2006, as well as growth in its Mexico domiciled subsidiary. The company returned to profitability in 2008 and 2009, but underwriting and net income results again turned negative during first quarter 2010, which is anticipated to be offset by reinsurance recoveries later in the year.
Offsetting these negative factors is Bupa Insurance Company's consistent premium growth and a strong presence in its niche market. Over the last five years, the company has consistently reported premium growth, and its five-year compound annual growth rate is 13%. Bupa Insurance Company primarily markets, underwrites and services individual major medical coverage to high net worth residents of Latin America and the Caribbean. The company currently provides health insurance products for over 80,000 individuals.
For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit Best's Ratings & Analysis.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at Best's Credit Rating Methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.