A.M. Best Downgrades Issuer Credit Ratings of Assurant, Inc.’s Health Insurance Subsidiaries; Places Ratings Under Review W...
June 11 2015 - 12:16PM
Business Wire
A.M. Best has downgraded the issuer credit ratings to
“bbb” from “bbb+” and affirmed the financial strength rating of B++
(Good) of the health insurance subsidiaries of Assurant,
Inc. (Assurant) (New York, NY) [NYSE: AIZ]: Time Insurance
Company (TIC) and John Alden Life Insurance Company
(John Alden). All ratings have been placed under review with
negative implications. TIC and John Alden are domiciled in
Milwaukee, WI and are collectively referred to as Assurant
Health.
The actions follow Assurant’s recent announcement that it has
concluded its review of strategic alternatives for its health
business and will exit the health insurance market by 2016. The
cost estimates associated with the market exit will be in the range
of $175-250 million and include premium deficiency reserves,
severance and retention, and other transaction costs – most of
which are expected to flow through TIC’s financial statements. A.M.
Best’s ratings on Assurant’s other subsidiaries, including those
parts of its employee benefits segment that is currently up for
sale, remain unchanged.
The under review status reflects the uncertainty related to the
future capitalization of Assurant Health, given the disclosed cost
estimates and anticipated operating losses for the remainder of
2015. A.M. Best notes that Assurant Health has historically
benefited from sizable cash infusions from Assurant, most recently,
a $30 million contribution in April 2015. Although A.M. Best
maintains its perspective that Assurant will continue to support
its obligations to customers and policyholders during the process,
it is currently unclear what level of risk-adjusted capitalization
will be maintained. The under review status will be resolved once
A.M. Best has a clearer picture as to the capital positions of TIC
and John Alden.
The methodology used in determining these ratings is Best’s
Credit Rating Methodology, which provides a comprehensive
explanation of A.M. Best’s rating process and contains the
different rating criteria employed in the rating process. Best’s
Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Rating Members of Insurance Groups
- Understanding BCAR for U.S. and
Canadian Life/Health Insurers
This press release relates to rating(s) 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 visit A.M.
Best’s Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2015 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
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A.M. BestMichael Adams, 908-439-2200, ext.
5133Senior Financial
Analystmichael.adams@ambest.comorAndrew Edelsberg,
908-439-2200, ext. 5182Vice
Presidentandrew.edelsberg@ambest.comorChristopher Sharkey,
908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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