OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has downgraded the financial strength rating to B+ (Good) from B++ (Good) and the issuer credit ratings to “bbb-” from “bbb” of the health insurance subsidiaries of Assurant, Inc. (Assurant) (headquartered in New York, NY) [NYSE:AIZ], Time Insurance Company (TIC) and John Alden Life Insurance Company (John Alden). TIC and John Alden are domiciled in Milwaukee, WI and are collectively referred to as Assurant Health. Additionally, A.M. Best has removed these ratings from under review with negative implications. The outlook assigned to all ratings is stable.
The downgrade of the ratings follows Assurant’s announcement that it expects additional losses to be reported in the Assurant Health run-off health operations in the range of approximately $215 million to $230 million on a pre-tax GAAP basis when it reports third-quarter 2015 results. The losses were driven by higher-than-anticipated claims experience on 2015 individual major medical policies, including strengthening of the premium deficiency reserve, as well as severance and other exit- related costs – most of which are expected to flow through TIC’s financial statements. Assurant expects to incur an additional $60 million to $70 million pre-tax in exit charges through the wind down period.
The stable outlook reflects A.M. Best’s belief that Assurant will continue to keep Assurant Health adequately capitalized through the run-off period. Assurant expects to contribute $200 million in fourth-quarter 2015. Assurant had previously announced it will substantially exit the health insurance market by 2016.
A.M. Best’s ratings on Assurant’s other subsidiaries remain unchanged.
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