Press Release - SEPTEMBER 19, 2014

A.M. Best Revises Outlook to Stable and Affirms Ratings of The Order of United Commercial Travelers of America

Marisa Bernardes
Financial Analyst
(908) 439-2200, ext. 5802

Raj Shah
Assistant Vice President
(908) 439-2200, ext. 5409

Christopher Sharkey
Manager, Public Relations
908 439 2200, ext. 5159

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644


A.M. Best has revised the outlook to stable from negative and affirmed the financial strength rating of B+ (Good) and the issuer credit rating of "bbb-" of The Order of United Commercial Travelers of America (UCT) (Columbus, OH).

The outlook revision for the ratings of UCT reflects the company's return to profitability in the most recent reporting period, its more than adequate level of risk-adjusted capitalization and its improved business profile to broaden product offerings, membership growth and fraternal expense level.

UCT continues to maintain a favorable level of risk-adjusted capitalization in support of its insurance and investment risks due to a conservative investment portfolio and reinsurance program. UCT has also managed the loss ratio to a favorable range and continues to implement rate increases when necessary in order to stabilize earnings and maintain profitability in its core Medicare Supplement line of business. To provide diversification and reduce premium revenue concentration risk associated with the Medicare Supplement line of business, UCT has implemented a strategic plan to gradually diversify its product portfolio by offering several life and health lines of business.

Partially offsetting the positive rating factors are UCT's operating losses in prior years, its limited business profile with high reliance on Medicare Supplement business and its challenges to grow the absolute level of capital and surplus as it broadens its product strategies and grows the membership base.

With Medicare Supplement policies still representing the majority of net premiums written, UCT continues to face a limited business profile. Additionally, it may be challenged to grow its new lines of business in a competitive environment, while operating profitably and preserving its capital position until these products gain scale.

Positive rating movement is unlikely in near term as all key financial metrics are reflected in the current ratings. The ratings may see negative movement if there is a return to operating losses leading to further loss of capital or deterioration in risk-adjusted capital.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.

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AMB# Company Name
008181 Order of United Comml Trvlrs of America