A.M. Best Upgrades Issuer Credit Rating of The Chesapeake Life Insurance Company
OLDWICK, N.J.--(BUSINESS WIRE)--Aug 8, 2018--A.M. Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “bbb” and affirmed the Financial Strength Rating of B++ (Good) of The Chesapeake Life Insurance Company (Chesapeake) (Oklahoma City, OK), the core insurance subsidiary of HealthMarkets, Inc. (HealthMarkets) (headquartered in North Richland Hills, TX). Additionally, A.M. Best has upgraded the Long-Term ICR to “bb+” from “bb” of HealthMarkets. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Chesapeake’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.
The rating upgrades reflect Chesapeake’s risk-adjusted capital being at the strongest level, as measured by Best’s Capital Adequacy Ratio, continued favorable operating results generating capital growth and its role as the sole writer of new insurance premium for HealthMarkets. The growth of HealthMarkets Insurance Agency, Inc., Chesapeake’s affiliated company and distribution channel, combined with the growth of third-party agency distribution, has resulted in Chesapeake’s continued premium growth in recent years. In addition, Chesapeake’s supplemental insurance portfolio branded as SureBridge has a diverse suite of supplemental health products and the organization previously exited products regulated by the Patient Protection and Affordable Care Act.
While a sizable portion of Chesapeake’s business is generated by HealthMarkets Insurance Agency, Inc., the amount of business produced by third-party distributors continues to increase. In addition, Chesapeake’s level of cash and short-term investments represent approximately one-quarter of invested assets, which drives liquidity measures but suppressed investment yields. Furthermore, A.M. Best notes that HealthMarkets’ unadjusted financial leverage remains elevated.
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 web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view .
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CONTACT: A.M. Best
Jeffrey Lane, +1 908-439-2200, ext. 5567
Senior Financial Analyst
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Director, Public Relations
KEYWORD: UNITED STATES EUROPE NORTH AMERICA NEW JERSEY
INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE
SOURCE: A.M. Best
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PUB: 08/08/2018 03:19 PM/DISC: 08/08/2018 03:19 PM