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FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 17, 2021 02:16 PM (EST)
AM Best has revised the outlook to stable from negative for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term ICR of “bb+” (Fair) of The Order of United Commercial Travelers of America (UCT) (Columbus, OH). The outlook of the FSR is stable.
The Credit Ratings (ratings) reflect UCT’s balance sheet strength, which AM Best assesses as strong as well as its weak operating performance, limited business profile and marginal enterprise risk management.
The stable Long-Term ICR outlook reflects UCT’s strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR); however, the company maintains an overall small absolute level of capital. The company’s operating performance has been weak the past couple of years due to headwinds from the COVID-19 pandemic and higher-than-expected claims. The company maintains modest market positions in a highly competitive accident and health segment in which many of its competitors enjoy significant scale advantages, which limits UCT’s business profile.
The ratings also reflect UCT’s favorable level of risk-adjusted capitalization in support of its insurance and investment risks due to a conservative investment portfolio and the extensive use of reinsurance. AM Best also notes that UCT has implemented an insurance oversight board to help manage its strategic planning, mitigate risks and provide industry expertise. AM Best will continue to monitor UCT’s capital level and operating performance over the near term as the oversight board works with the company.
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.