9 Insurers See Ratings Changes
Agencies react to HealthSpring’s acquisition plan; S&P affirms negative outlook of Markel Corp., revises view of UnitedHealth; Fitch affirms Humana.
Insurance Networking News, August 31, 2010
A.M. Best, Moody’s Investors Service and Standard & Poor's announced ratings updates. The following are some of the most recent:
Ameriprise Financial Inc. and its life subsidiaries
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A.M. Best has revised the outlook to stable from negative and affirmed the financial strength rating (FSR) of A+ (superior) and issuer credit ratings (ICR) of “aa-” of RiverSource Life Insurance Co. and its wholly owned subsidiary, RiverSource Life Insurance Co. of New York. A.M. Best also has upgraded the ICRs to “a+” from “a” and affirmed the FSR of A (excellent) of Ameriprise P&C Companies and its members. The outlook for these ratings is stable.
The Ameriprise P&C Companies’ ratings are based on the consolidated operating results and financial position of IDS Property Casualty Insurance Co. and its wholly owned, fully reinsured subsidiary, Ameriprise Insurance Co., A.M. Best says. Together, these companies represent the key life insurance and property/casualty subsidiaries of Ameriprise Financial Inc. (Ameriprise).
Concurrently, A.M. Best has revised the outlook to stable from negative and affirmed the ICR of “a-” and the existing debt ratings of Ameriprise. The revised outlook for the life insurance companies primarily reflects their strong risk-adjusted capital position and the improved liquidity and overall balance sheet strength of Ameriprise, the rating agency says.
AXIS Capital Holdings Ltd. and subsidiaries
S&P announced that ratings on Bermuda-based AXIS Capital Holdings Ltd. (A-/Stable/--) and its operating subsidiaries are not affected by the announcement of the resignation of the CFO, David Greenfield, effective Nov. 30, 2010. Greenfield is leaving the company on good terms to pursue other interests. AXIS has initiated a search for a successor to Greenfield. S&P doesn’t believe this management change is a concern given the strong executive management team and its proven track record.
Moody’s and S&P reacted to the announcement that Bravo Health Inc. will be purchased by HealthSpring Inc. for $545 million in cash. The targeted completion date for the acquisition is on or before the end of 2010, pending regulatory approval.
Moody's affirmed the debt ratings of Bravo (senior secured at B1; stable outlook) and the Ba1 IFS rating of its operating subsidiary. The rating affirmation reflects the similar lines of business in which HealthSpring operates as well as their similar credit profiles and the profile of the combined organization following the completion of the transaction, Moody’s says. Bravo's ratings reflect its small membership base, its concentration in the Medicare Advantage (MA) segment, its historically low, but improving, earnings margins, its adequate capitalization level and moderate financial leverage. The ratings also reflect the company's strong market position in the Philadelphia area and its experienced management team.
S&P announced that ratings on Bravo Health Inc. (B+/Stable/--) were unaffected by the announcement. Because of Bravo's improved financial profile, strong membership growth, and continued emphasis on and proficiency with managing medical cost and utilization, S&P’s recently (July 22) raised its counterparty credit rating on Bravo to 'B+', from 'B'. However, the rating is constrained by the company's concentration in the government-sponsored market segment and a geographic concentration in Pennsylvania. The company's operating performance is a key strength to the rating, S&P says.
A.M. Best downgraded the FSR to B++ (good) from A- (excellent) and the ICR to “bbb+” from “a-” of Glacier Reinsurance AG (Glacier Re). At the same time, A.M. Best has placed both ratings under review with negative implications.
These actions follow Glacier Re’s announcement that it will cease underwriting new business and place its existing portfolio into a self-managed run off effective immediately. A.M. Best’s review will encompass an assessment of the financial position of Glacier Re as a run-off company, its staffing and other related issues.
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