March
06, 2019 05:20 PM Eastern Standard Time
OLDWICK,
N.J.--(BUSINESS WIRE)--AM
Best has upgraded the Financial Strength Rating to A- (Excellent) from
B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” from
“bbb+” of The Chesapeake Life Insurance Company (Chesapeake) (Oklahoma City,
OK). The outlook of these Credit Ratings (ratings) is stable. These rating
actions follow the acquisition of Chesapeake and its parent, HealthMarkets,
Inc. (HealthMarkets) (headquartered in North Richland Hills, TX), by Golden
Rule Financial Corp, a subsidiary of UnitedHealth Group Incorporated
(UnitedHealth Group) [NYSE: UNH]. AM Best also has withdrawn the Long-Term ICR
of “bb+” with a stable outlook of HealthMarkets.
The
ratings reflect Chesapeake’s balance sheet strength, which AM Best categorizes
as strongest, as well as its adequate operating performance, limited business
profile and marginal enterprise risk management (ERM).
The
rating upgrades reflect lift from Chesapeake’s ultimate parent, UnitedHealth
Group, which acquired HealthMarkets and its subsidiaries. Chesapeake and its
affiliated distribution capabilities are expected to enhance the individual
specialty operations of UnitedHealth Group’s UnitedHealthcare operations.
Chesapeake’s
risk-adjusted capital is at the strongest level, as measured by Best’s Capital
Adequacy Ratio, and has been maintained at this level over the past few years
based upon a trend of favorable operating results. Earnings have significantly
improved over the past few years with return on equity of 20% or greater driven
by better than expected claims experience, lower administrative expenses and
increasing premiums.
Chesapeake
has had a trend of favorable premium growth from increased sales by
HealthMarkets Insurance Agency, Inc., Chesapeake’s affiliated company and
primary distribution channel. Chesapeake’s supplemental insurance portfolio
branded as SureBridge has a diverse suite of supplemental health and life
products. AM Best expects that Chesapeake’s ERM will benefit from that of its
new parent organization.
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 Understanding Best’s Credit Ratings. For information on the
proper media use of Best’s Credit Ratings and AM Best press releases, please
view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best
is a global rating agency and information provider with a unique focus on the
insurance industry. Visit www.ambest.com for more information.
Copyright © 2019 by A.M. Best Rating Services,
Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Contacts
Bridget Maehr
Associate Director
+1 908 439 2200, ext. 5321
bridget.maehr@ambest.com
Associate Director
+1 908 439 2200, ext. 5321
bridget.maehr@ambest.com
Sally Rosen
Senior Director
+1 908 439 2200, ext. 5280
sally.rosen@ambest.com
Senior Director
+1 908 439 2200, ext. 5280
sally.rosen@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com
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