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Best’s News & Research Service - January 13, 2022 12:46 PM (EST)

AM Best Removes LifeMap Assurance Co From Under Review; Affirms Credit Ratings of LifeMap Assurance Co and USAble Life Ins Co

  • January 13, 2022 12:46 PM (EST)

Oldwick //BestWire// - AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of LifeMap Assurance Company (LifeMap) (Portland, OR). The outlook assigned to these Credit Ratings (ratings) is positive. Additionally, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of USAble Life Insurance Company (USAL) (Little Rock, AR). The outlooks of these ratings are stable.

These rating actions follow the Jan. 3, 2022 announcement that LifeMap’s ultimate parent, Cambia Health Solutions, Inc. (Cambia), has finalized its partnership agreement with Life and Specialty Ventures, LLC (LSV) under which LifeMap’s ownership has transferred to LSV. LifeMap’s ratings take into consideration its strategic role under LSV, as well as the capital and operational support provided to LifeMap by LSV through its controlling owners: Blue Cross and Blue Shield of Florida, Inc. d.b.a. Florida Blue, USAble Mutual Insurance Company, and Cambia.

LifeMap’s ratings reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).

The balance sheet strength assessment of very strong is based on its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR); this is partially offset by a somewhat elevated level of stock in its investment portfolio. Marginal operating performance has been characterized by mixed operating results and a downward trend in premium in recent years. The company maintains a relatively modest share of its competitive ancillary health market chiefly, in four Northwestern states where it has experienced pricing challenges. However, AM Best expects LifeMap to benefit from its new ownership under LSV, as LSV has established expertise in managing ancillary health product businesses.

USAL’s ratings reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate ERM.

The balance sheet strength assessment of strongest is based on its strongest level of risk-adjusted capitalization, as measured by BCAR. Aside from an operating loss reported through late 2021 due to an increase in death benefits and accident & health claims, USAL has consistently reported favorable operating gains in recent years. The company’s premium grew through 2020 and late 2021 following a downward trend. The company maintains a nominal market share in its operating territory and assumes nearly half its gross premium from other carriers through reinsurance. However, LSV’s new strategic partnership with Cambia is projected to grow its gross premium & administrative service fees sizably, which could improve its future market position. USAL operates in highly competitive dental, life and disability markets, as its business is concentrated in dental products, and also geographically in five states.

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.

Mergers And Acquisitions Dental Insurance Disability Insurance Financial Strength Life Insurers Press Release A.M. Best Rating Services, Inc. Insurance Best's Credit Rating Action Issuer Credit Rating

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