OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Long-Term Issuer Credit Ratings (Long-Term ICR) of “b+” of Universal American Corp. (Universal American) (headquartered in White Plains, NY) [NYSE:UAM]. In addition, A.M. Best has affirmed the Financial Strength Rating (FSR) of B+ (Good) and the Long-Term ICR of “bbb-” of American Progressive Life & Health Insurance Company of New York (headquartered in Lake Mary, FL). Furthermore, A.M. Best has affirmed the FSR of B (Fair) and the Long-Term ICR of “bb+” of SelectCare of Texas, Inc. (Houston, TX). The outlook of these Credit Ratings (ratings) remains stable. Concurrently, A.M. Best has withdrawn these ratings at the request of Universal American to no longer participate in A.M. Best’s interactive rating process.
The ratings reflect Universal American’s focus on operational improvements, reduction in administrative expenses and initiatives to improve operating performance, which has resulted in improved earnings in the first half of 2016. Furthermore, cash at Universal American is projected to improve in 2016, largely driven by the proceeds from the sale of operations.
However, A.M. Best remains concerned about Universal American’s trend of net losses, limited financial flexibility, increased business concentration risk and significant dividends from its insurance subsidiaries. In addition, consolidated premium revenues are lower than historical levels due to the recent sale of operations.
Furthermore, the consolidated business is now heavily concentrated in Medicare, with both Accountable Care Organizations (ACOs) in its non-insurance operations and Medicare Advantage in its core markets in Texas and the Northeast regions through the insurance entities.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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.
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