A.M. Best downgraded the financial strength and issuer credit ratings ofAssurant Health’s insurance lines Wednesday to “good” from “excellent” after Assurant Inc. announced it plans to exit the health insurance business either by selling it or closing it.
A.M. Best, of Oldwick, N.J., said the ratings are for Assurant’s Time Insurance Co. and John Alden Life Insurance Co. The outlook for the ratings is stable.
Assurant Health’s products are underwritten and issued by Time Insurance and John Alden Life Insurance Co.
The ratings downgrade follow Assurant Inc.’s (NYSE: AIZ) Tuesday announcement that it is exploring strategic alternatives for its health and employee benefits business segments, including a potential sale. If no buyer emerges, Assurant Inc. said it will exit the health insurance market in 2016.
Best’s financial strength rating represents the organization’s opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations. The Assurant Health businesses now are rated as having a good ability to meet their ongoing insurance obligations instead of an excellent ability to do so.
“A.M. Best believes that Assurant will continue to support its obligations to customers and policyholders during the (sale or exit) process,” Best said in a press release.
A.M. Best noted that over the past several quarters, Assurant Health has reported higher-than-anticipated claims in certain blocks of business, resulting in significant operating losses. Assurant executives have said the losses resulted from a significant regulatory change in late 2013 related to the Affordable Care Act.
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