AM Best

A.M. Best Upgrades and Assigns Ratings to Texas Hospital Insurance Exchange; Revises Outlook to Stable



Gregory Williams

(908) 439-2200, ext. 5815

Joseph Roethel

(908) 439-2200, ext. 5630

Public Relations

Jim Peavy

(908) 439-2200, ext. 5644

Rachelle Morrow

(908) 439-2200, ext. 5378


OLDWICK, N.J. - JULY 19, 2007 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating (FSR) to B+ (Good) from B (Fair) and assigned an issuer credit rating (ICR) of "bbb-" to Texas Hospital Insurance Exchange (THIE) (Austin, TX). The outlook for the FSR has been revised to stable from positive, and the outlook assigned to the ICR is stable.

The ratings reflect THIE's continued generation of operating income, improved capitalization and conservative reserve position. The ratings also acknowledge THIE's business focus as it provides commercial insurance products to small and rural Texas hospitals, which has led to high policyholder retention and contributed to favorable overall performance. The actions taken by management over the years and improved market conditions have resulted in favorable overall results and have bolstered capitalization, while positioning THIE to remain profitable in the near term. The outlook is based on the company's prospects of continued operating profitability and the maintenance of its improved surplus position.

These positive rating factors are partially offset by THIE's historically high, although improved, underwriting leverage ratios, dependence on reinsurance, weak liquidity measures, narrow spread of risk and high expense levels.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors.

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AMB# Company Name
003650 Texas Hospital Insurance Exchange