AM Best


A.M. Best Upgrades Issuer Credit Ratings of AultCare Health Insuring Corporation and Its Subsidiary


CONTACTS:

Jennifer Asamoah
Financial Analyst
+1 908 439 2200, ext. 5203
jennifer.asamoah@ambest.com

Bridget Maehr
Senior Financial Analyst
+1 908 439 2200, ext. 5321
bridget.maehr@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 - JUNE 22, 2017 10:38 AM (EDT)
A.M. Best has upgraded the Long-Term Issuer Credit Ratings to “bbb+” from “bbb” and affirmed the Financial Strength Rating of B++ (Good) of AultCare Health Insuring Corporation and its subsidiary, AultCare Insurance Company. The outlook for these Credit Ratings (ratings) is stable. Collectively, the group is referred to as AultCare Health Group (AultCare). Both companies are domiciled in Canton, OH.

The rating actions reflect the group’s consistently favorable premium and operating earnings over the past four years, as well as organic capital growth and an improved level of risk-adjusted capital. Additionally, AultCare is strategically aligned with and has the financial support from its ultimate parent, Aultman Health Foundation (Aultman). Aultman is a fully integrated health care delivery system and AultCare is a significant contributor of consolidated revenue and earnings for Aultman. The ratings also consider the implicit support received from Aultman and AultCare’s favorable market share in its core service area. AultCare’s premium growth has been the result of material enrollment gains in its Medicare Advantage segment and higher reimbursement rates in 2016. Furthermore, AultCare reported significant improvement in underwriting earnings in the Medicare Advantage line of business compared to the previous year. A trend of positive net income has contributed to a good level of organic capital growth over several years through retained earnings.

AultCare has been pressured by the competitive nature of the commercial market, which drives operating challenges. Underwriting performance in its commercial business has fluctuated over the last five years. AultCare’s Medicare Advantage business is exposed to potential decreases in federal funding and reimbursement rates. As Medicare Advantage becomes a larger portion of overall operations, total operating margin could moderate as this product typically produces lower margins. Prospectively, A.M. Best anticipates continued favorable operating results based on management’s strategic initiatives, enhanced reporting capabilities and strengthened medical management. Further, although the individual exchange business has not developed unfavorable results, this segment continues to experience challenges.

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.

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


Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.