JANUARY 07, 2021 02:48 PM (EST)
AM Best Affirms Credit Ratings of EyeMed Insurance Company
|Jennifer Asamoah |
Senior Financial Analyst
+1 908 439 2200, ext. 5203
+1 908 439 2200, ext. 5321
Manager, Public Relations
+1 908 439 2200, ext. 5159
+1 908 439 2200, ext. 5644
FOR IMMEDIATE RELEASE
OLDWICK - JANUARY 07, 2021 02:48 PM (EST)
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” of EyeMed Insurance Company (EIC) (Phoenix, AZ). The outlook of these Credit Ratings (ratings) is stable. EIC, along with EyeMed Vision Care LLC, are subsidiaries of Luxottica Group S.p.A., and these companies are the North America-based entities of EssilorLuxottica S.A., the ultimate parent.
The ratings reflect EIC’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings consider EIC’s strategic importance to EssilorLuxottica S.A., as well as the comprehensive operational support provided by its parent company.
EIC’s balance sheet strength is underpinned by risk-adjusted capitalization at the very strong level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects risk-adjusted capitalization to remain at the very strong level due to sustainable organic capital generation predominantly from retained earnings. The balance sheet strength assessment also reflects EIC’s low-risk and highly liquid asset portfolio, as well as favorable operating cash flow. In addition, the company benefits from solid financial flexibility. The ratings also take into consideration the dependence on reinsurance programs and the history of dividend payments.
EIC has a history of strong and stable operating performance and profitability measures that have increased through the third quarter 2020. EIC’s return-on-equity ratio has been solid and is expected to remain favorable in the near term. EIC has reported strong premium growth, a trend that is expected to continue in the near term. The ratings also reflect the organization’s established market presence and solid overall market share in the vision care space. Furthermore, EIC is strategically important to EssilorLuxottica S.A’s vertical integrated business model as its primary insurance entity. The ratings also consider EssilorLuxottica S.A’s well-established global market presence and overall creditworthiness, which supports the insurance operations.
EssilorLuxottica S.A is a key player in the U.S. managed vision care business through EyeMed Vision Care, LLC with business from this entity and other health plans assumed by EIC. In addition, the ratings acknowledge EIC’s well-established ERM program with a fully developed risk management framework and committee structure.
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 Guide to 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.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.