AM Best Upgrades Credit Ratings of Liberty Union Life Assurance Company
18 Junio 2024 - 10:38AM
Business Wire
AM Best has upgraded the Financial Strength Rating to B+
(Good) from B (Fair) and the Long-Term Issuer Credit Rating to
“bbb-” (Good) from “bb+” (Fair) of Liberty Union Life Assurance
Company (Liberty Union Life) (Troy, MI). The outlook of these
Credit Ratings (ratings) is stable.
The ratings reflect Liberty Union Life’s balance sheet strength,
which AM Best assesses as strong, as well as its marginal operating
performance, limited business profile and appropriate enterprise
risk management (ERM).
The ratings upgrade reflects AM Best’s view of Liberty Union
Life’s ERM program, which is considered appropriate for its size.
Liberty Union Life’s ERM program has continuously improved over the
past few years. Liberty engaged with an external consultant in 2018
to perform an ERM maturity assessment and improve this framework,
as well as an external information technology auditor to verify its
cyber security. As a result, management has identified and assessed
its most significant risks and risk mitigating factors/controls in
a recently developed risk register. The company continues to use
outside vendors to evaluate its system and report weaknesses.
Liberty Union Life's risk appetite is prefaced on its ability to
mitigate risks, as demonstrated by its strategic pivot to lower
risk self-insured, medical stop-loss products from higher risk
fully insured major medical products in recent years.
Liberty Union Life’s balance sheet strength is supported by its
risk-adjusted capitalization at the strongest level, as measured by
Best’s Capital Adequacy Ratio (BCAR), and favorable liquidity
metrics. However, AM Best notes the company’s relatively modest
level of absolute capital and surplus, as well as its limited
financial flexibility. The company’s operating performance has
historically been driven by consistent, albeit modest, operating
earnings. However, the company did report its first operating loss
since 2009, which was driven by a higher frequency in large claims.
Liberty Union Life expects to return to profitability in 2024.
Liberty Union Life continues to be challenged by a limited
business profile, reflecting its nominal market share within its
operating area, a business concentration in its small group medical
stop-loss product and geographic concentration in Michigan, as well
as highly competitive medical stop-loss and supplemental accident
and health markets, which include larger national and regional
health carriers.
This press release relates to Credit Ratings that have been
published on AM 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 AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please
view Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Jennifer Asamoah Senior Financial Analyst +1
908 882 1637 jennifer.asamoah@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Jon Housel Financial Analyst +1 908 882
1898 jon.housel@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com