Best’s News & Research Service - September 20, 2023 04:17 PM (EDT)
AM Best Upgrades Credit Ratings for The Union Labor Life Insurance Company
- September 20, 2023 04:17 PM (EDT)
Oldwick //BestWire// - AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” (Excellent) from “a-” (Excellent) of The Union Labor Life Insurance Company (ULL), domiciled in Silver Springs, MD. The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect ULL’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The rating upgrades are driven by the improvements in ULL’s business profile while maintaining profitable operations and surplus growth. Through the re-launch of UllicoSelect (previously known as UnionCare), ULL has diversified its distribution network while expanding its target market by providing products and services to individual union members and their dependents. Investments in innovation have allowed the company to adapt to evolving consumer needs and target markets where it has the most opportunity. In light of growing labor rights and unionization pushes throughout the United States, ULL may ultimately benefit from favorable premium growth in its primary business segment. ULL’s separate account commercial mortgage business has also performed well and has been a material source of earnings for the company for many years.
ULL has reported consistent profitability over the last several years with some volatility in its core business lines, which can be expected from time to time. AM Best notes that many stop-loss insurance carriers are experiencing larger claims due to higher specialty drug prices. Nonetheless, profitable earnings have allowed for organic growth of capital and surplus and the maintenance of risk-adjusted capital, which remains at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). ULL also has a strong liquidity profile, enhanced by the sale of Ullico Labor Captive to Ullico, Inc.
Partially offsetting these positive rating factors is ULLs investment performance, which lags behind peers but is in line with the conservative nature of the company’s portfolio. Despite low yield, ULL has not lowered credit quality or invested in alternative assets to achieve greater yields. While the company’s business profile has been expanding in recent years it does remain somewhat limited by its sole focus on the union market.
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 Performance Assessments, 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.