Press Release - FEBRUARY 14, 2018
Best’s Special Report: U.S. Life/Health Sector Credit Rating Upgrades Outpace Downgrades in 2017
FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 14, 2018
The Best’s Special Report, titled, “Life/Health Sector Rating Upgrades Outpace Downgrades in 2017,” states that the change in direction was primarily driven by improving levels of risk-adjusted capitalization, particularly among life/annuity (L/A) carriers, owing partly to benign credit market conditions and favorable equity markets, which buoyed earnings.
Likewise, health insurers reported improved risk-adjusted capitalization, due to better operating results in the individual health care exchange business and, to a lesser extent, overall slower premium growth. Improved operating results were driven partly by consecutive years of high rate increases and a narrowing of provider networks.
A.M. Best reported 31 upgrades and 15 downgrades for life/health carriers in 2017, compared with 16 upgrades and 23 downgrades in 2016. Overall, A.M. Best took action on the Long-Term ICRs of 380 rating units, which describes either an individual insurer or a consolidation of companies and is the financial basis on which A.M. Best performs its Credit Rating (rating) evaluations. The vast majority of rating actions in 2017 were affirmations (77%).
The following are some other highlights from the report.
A.M. Best will continue to keep a close eye on the U.S. life/health sector’s earnings, premium trends and risk-adjusted capital levels, as well as hold discussions with management regarding their plans for 2019.
To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=270544 .
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.