AM Best Revises Outlooks to Positive for The Union Labor Life Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of The Union Labor Life Insurance Company (ULL), domiciled in Silver Spring, MD.

The Credit Ratings (ratings) reflect ULL’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The positive outlooks represent the improvement in ULL’s business profile in recent years. The company continues to benefit from its strong market position within the Taft-Hartley market, specifically within the medical stop loss market, and consistently maintains high policy persistency rates across its lines of business. ULL has diversified operations with its traditional insurance operations, fee income from separate accounts, and favorable performance from its affiliated property/casualty insurance captive. Additionally, the company has a nationwide presence in the United States; however, premium concentration is slightly above the industry.

The company’s balance sheet strength assessment continues to be supported by its strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), complemented by its conservative allocation of invested assets and high quality reinsurance. ULL’s operating performance is underpinned by consistently favorable, albeit fluctuating, bottom-line results driven by disciplined underwriting, expense management, and stable investment income. AM Best notes that statutory earnings have been impacted negatively by higher-than-expected mortality and morbidity in the group life and stop loss lines of business over the past two years as a result of the COVID-19 pandemic. However, AM Best believes that earnings will remain positive and should continue to improve as the impacts from the pandemic begin to wane. The company also benefits from an extensive and developed ERM framework and continues to enhance the program.

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