AM Best Upgrades Credit Ratings of BEST Life and Health Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating to “bbb” (Good) from “bbb-” (Good) of BEST Life and Health Insurance Company (BEST Life) (Austin, TX). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

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

The rating upgrades reflect improvement in BEST Life’s ERM program, which became more formalized. BEST Life significantly enhanced its risk reporting structure, including risk identification, risk monitoring and mitigation strategies for relevant risks. The company further developed its stress testing model to assess the financial impact of various scenarios. BEST Life’s ERM framework has exhibited the ability to effectively monitor and control risks as evidenced by consistent capital and surplus growth despite operating in competitive markets.

The organization’s strong balance sheet strength assessment is based on the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is partially offset by a modest level of absolute capital and surplus, limited financial flexibility and preferred equity holdings that comprise approximately 20% of capital and surplus. Operating performance is assessed as adequate as BEST Life has generated favorable premium development and consistent profitability in recent years. Premium growth stems from the individual lines of business through the Affordable Care Act exchange marketplaces, as well as from a recently launched off-exchange product. The company’s limited business profile assessment reflects its relatively small size and lack of material market share in any region. Furthermore, the company is exposed to concentration risk as dental premium comprises the vast majority of business.

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