Many Americans are struggling with high out-of-pocket costs for health care.
A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit ratings of "a-" of Paratransit Insurance Company, A Mutual Risk Retention Group (Paratransit) (Memphis, TN).
The ratings reflect Paratransit's sound capitalization, strong reinsurance program and high member retention rates. Partially offsetting these positive factors is the company's business risk associated with writing one class of business within a narrow market scope, albeit with a good geographic spread of risk. Nonetheless, the company is committed to reserve adequacy and has numerous years of experience in its niche market of non-urban taxicabs and paratransit providers.
The positive rating factors are primarily derived from Paratransit's focus on solvency, a high quality investment portfolio and the conservative approach to the generation of new business. In addition, the company's member contribution policy, requiring new and renewing members to pay an annual non-refundable contribution per vehicle, assists Paratransit in generating surplus and supporting expansion.
A.M. Best recognizes Paratransit's solid operating performance before policyholder dividends and strong capitalization as measured by Best's Capital Adequacy Ratio (BCAR).
A.M. Best could downgrade the ratings or revise the outlook if the company's BCAR declines, operating performance and risk profile deteriorate, there is an increase in retention, or a material loss in capital occurs that does not support the ratings.
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