Press Release - JANUARY 24, 2018

A.M. Best Upgrades Credit Ratings of USHEALTH Group, Inc.’s Subsidiaries


CONTACTS:
 Craig Draghi
Financial Analyst
+1 908 439 2200, ext. 5164
craig.draghi@ambest.com

Doniella Pliss
Associate Director
+1 908 439 2200, ext. 5104
doniella.pliss@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - JANUARY 24, 2018
A.M. Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and Long-Term Issuer Credit Rating to “bbb” from “bbb-” of Freedom Life Insurance Company of America, Enterprise Life Insurance Company and National Foundation Life Insurance Company, all subsidiaries of USHEALTH Group, Inc. (collectively referred to as USHEALTH Group). All companies are domiciled in Fort Worth, TX. The outlooks of these Credit Ratings (ratings) have been revised to stable from positive.

The ratings reflect USHEALTH Group’s balance sheet strength, which A.M. Best categorizes as adequate, as well as its strong operating performance, limited business profile and adequate enterprise risk management.

The rating upgrades reflect USHEALTH Group’s positive earnings trends over the past several years in support of favorable absolute capital growth and significant revenue growth attributed to an expanding captive sales force. In response to the Patient Protection and Affordable Care Act (ACA), USHEALTH Group gradually transitioned its business portfolio to supplemental health and ancillary products, which are not directly regulated by the law. These products have proven to be more profitable than previously offered traditional health policies. Additionally, USHEALTH Group has improved its loss ratio in recent years due to more stringent underwriting guidelines and rate increases. In addition, the group has focused on growing its captive agent force, which has driven sales growth substantially with net premiums written reporting a five-year compound annual growth rate of 22.9% in 2016.

Offsetting rating factors include a lack of product and geographic diversification, as the group’s premium is derived principally from a single product concept, and approximately one-half is derived from three states. Additionally, the USHEALTH Group operates in an increasingly competitive market that is tied closely to the regulatory environment.

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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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