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FOR IMMEDIATE RELEASE
OLDWICK - AUGUST 05, 2021 11:38 AM (EDT)
AM Best has upgraded the Financial Strength Rating (FSR) to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” (Excellent) from “bbb+” (Good) of AmFirst Specialty Insurance Company (AmFirst Specialty) (Ridgeland, MS). Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of AmFirst Insurance Company (AmFirst) (Oklahoma City, OK) and its affiliates, AmFirst Life Insurance Company, I.I. (San Juan, Puerto Rico) and New Providence Life Insurance Company (New Providence Life) (Nassau, Bahamas). All of the companies listed above comprise AmFirst Holdings, Inc. (AmFirst or the group). The outlook of these Credit Ratings (ratings) is stable.
The ratings upgrade for AmFirst Specialty reflects the company’s increased strategic importance to the AmFirst Group, from its integration in group operations through the assumption of its affiliates’ Premium Saver business, which now accounts for the vast majority of premiums and earnings for AmFirst Specialty. Additionally, AmFirst Specialty receives implicit and explicit support from its immediate parent, AmFirst Insurance, and holding company AmFirst Holdings Inc.
The ratings of the AmFirst group reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The AmFirst group exhibits the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and maintains solid liquidity and leverage measures. However, these favorable attributes are offset by the group’s limited financial flexibility, given its limited access to capital markets. AmFirst’s flagship medical gap coverage product (Premium Saver) and its dental association business continue to stabilize reported net earnings. For much of 2020 and into 2021, COVID-19 related effects in the economic environment and the decline of utilization of services positively impacted the profitability of AmFirst’s health products. Premium Saver’s growth was driven by improved distribution, with increased profitability partially due to deferral of care and most primary health insurers waiving testing fees and co-pays for treatment of COVID-19, which alleviated out-of-pocket expenditures for AmFirst’s Premium Saver subscribers. AM Best expects both of these trends to reverse in the near future as economic conditions rebound and primary insurers cease waiving testing fees and co-pays. While AM Best expects the reversal of this trend to be favorable to premium growth, profitability is projected to moderate over the near to medium term. Additionally, the reduction in economic activity in 2020 due to the pandemic drove dental premiums lower; however, a sharp decline in utilization resulted in lower benefit ratios and improved earnings results.
AM Best views the AmFirst group’s business profile as limited due to both product and geographic concentration. AmFirst’s premiums are largely derived from the Premium Saver product and the majority of its premium from a limited number of states. AM Best acknowledges the geographic expansion of products, but does not expect a material shift in premium concentration in the near to medium term.
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 use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.