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FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 14, 2016 02:40 PM (EDT)
A.M. Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” from “bbb+”of Community Hospital Alternative For Risk Transfer (A Reciprocal Risk Retention Group) (CHART) (headquartered in Upper St. Clair, PA). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The rating upgrades reflect strong underwriting and operating results from favorable reserve development, driving significant improvement in risk-adjusted capitalization, and a focused business strategy partially offset by the challenges of a narrow business profile as a mono-line medical professional liability (MPL) writer with limited geographic diversification.
CHART continues to execute its underwriting discipline for actuarially needed premium in later stages of an ongoing soft MPL market. In CHART’s loss experience, frequency has continued a gradual downward trend, while severities have stabilized. Expense ratios are generally low, as CHART directly selects and underwrites its member hospitals. CHART’s strong underwriting has contributed the majority of surplus growth, which has nearly doubled over the five-year period that ended Dec. 31, 2015. CHART’s excellent loss performance and claims management continue to reduce reserve requirements for its existing book of business, further enhancing the company’s capital adequacy, as measured by Best’s Capital Adequacy Ratio (BCAR).
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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