AM Best Assigns Credit Ratings to CVS Caremark Indemnity Ltd.
30 Julio 2024 - 1:14PM
Business Wire
AM Best has assigned a Financial Strength Rating of A
(Excellent) and a Long-Term Issuer Credit Rating of “a” (Excellent)
to CVS Caremark Indemnity Ltd. (CVS Caremark Indemnity) (Bermuda).
The outlook assigned to these Credit Ratings (ratings) is
stable.
The ratings reflect CVS Caremark Indemnity’s balance sheet
strength, which AM Best assesses as very strong, as well as its
adequate operating performance, neutral business profile and
appropriate enterprise risk management (ERM).
CVS Caremark Indemnity whose parent company is CVS Health
Corporation (CVS Health), assumes Medicare Part D business from an
affiliated insurance company, SilverScript Insurance Company
(SilverScript) under a quota share agreement and writes liability
coverage, workers’ compensation and other property/casualty cover
for affiliates within the CVS Health organization.
CVS Caremark Indemnity’s very strong balance sheet strength
assessment is supported by the strongest level of risk-adjusted
capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR)
model, which is driven by its favorable level of capital and
surplus. Additionally, CVS Caremark Indemnity has adequate
liquidity ratios and has reported positive cash flows from
operations in each of the last three years. CVS Caremark Indemnity
currently does not use a line of credit or a credit facility.
CVS Caremark Indemnity’s adequate operating performance reflects
consistent earnings on an operating and net basis. Underwriting
income is primarily driven by its quota share reinsurance agreement
with SilverScript for its Medicare Part D business, which comprises
approximately two-thirds of net premium written. Net investment
income has also been a consistent contributor to overall
earnings.
AM Best assesses CVS Caremark Indemnity’s business profile as
neutral. This is driven by CVS Caremark Indemnity’s concentration
in its reinsurance assumed business, which is offset by geographic
diversification. In addition, all business written and assumed by
CVS Caremark Indemnity is derived from CVS Health entities.
CVS Caremark Indemnity is incorporated into the larger CVS
Health Corporation ERM program, which AM Best assesses as
appropriate. The ERM program coordinates a holistic risk management
process that emphasizes collaboration and information sharing among
business functions to identify and collectively respond to the
organization’s full range of risks.
AM Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated in the
United States and throughout the world. For current Best’s Credit
Ratings and independent data on the captive and alternative risk
transfer insurance market, please visit
www.ambest.com/captive.
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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