OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlook to negative from stable and affirmed the financial strength rating of B (Fair) and the issuer credit ratings of “bb” of SHA, L.L.C. (d/b/a FirstCare) and its wholly owned subsidiary, Southwest Life and Health Insurance Company (SWL&H). Both companies are domiciled in Austin, TX. Concurrently, A.M. Best has withdrawn the ratings due to management’s request to no longer participate in A.M. Best’s interactive rating process.
The rating actions reflect FirstCare’s unfavorable underwriting and operating results. The company’s underwriting losses were attributed mostly to risk associated with expansion of the Medicaid block of business into new markets along with reimbursement rate issues. However, on a consolidated basis, the commercial line of business has been profitable over the last two years.
The negative outlook reflects the trend of weakened underwriting results and the potential impact that future underwriting losses could have on FirstCare’s capitalization and its need for further capital infusions. The ratings do not reflect future strategic financial changes that may occur within the group.
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.
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