A.M. Best Special Report: L/H Impairments Match Record Low; Accident & Health Remains Trouble Spot
OLDWICK, N.J.--(BUSINESS WIRE)--One financial impairment of a U.S. life/health insurer was recorded in 2013, matching the low last seen in 1962. The impairment of Florida-based Universal Health Care Insurance Co., Inc. (Universal) represented 0.07% of the industry compared with an average financial impairment frequency of 0.80% over the period of this A.M. Best special report study.
The life/health (L/H) industry continued to outperform the property/casualty (P/C) segment by a wide margin in terms of impairments despite a sharp decline in impairments on the P/C side in 2013.
The 2013 life/health impairment brings the total number of impairments for this study period to 739 when added to three other impairments from past years that have come to light. The 2013 impairment—an accident and health insurer like the two recorded in 2012—remained consistent with recent trends for financially impaired companies in the L/H industry. Universal’s capital and surplus plummeted in 2012 while its net loss nearly doubled, but media reports also have detailed investigations into possible criminal conduct at the company.
Of note, however, is that the company operated in the individual health segment, specifically Medicare business, which A.M. Best has identified as facing particular strain under federal health care reforms. In general, the most common cause of impairment has been inadequate pricing and/or deficient loss reserves.
To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=226804.
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