A.M. Best Assigns Ratings to Community Hospital Alternative for Risk Transfer (A Reciprocal Risk Retention Group) [Health & Beauty Close – Up]

A.M. Best Co. has assigned a financial strength rating of B++ (Good) and an issuer credit rating of "bbb" to Community Hospital Alternative for Risk Transfer (A Reciprocal Risk Retention Group) (CHART) (Burlington, VT).

The outlook assigned to both ratings is stable.

These ratings reflect CHART's strong operating history, which is attributable to premium adequacy and favorable reserve development from prudent reserving practices and a competitive advantage in its selected market niche. The favorable loss reserve development, which has occurred over most of CHART's existence, is one of the rating attributes that A.M. Best believes may contribute to the company building surplus in the near to medium term. CHART's primary focus is to provide hospital and medical professional liability insurance to community hospitals and employed physicians in Pennsylvania, West Virginia and New York.

These positive rating factors are partially offset by CHART's risk-adjusted capitalization that is supportive of its ratings; however, potentially susceptible to adverse scenarios and inherent industry-wide challenges associated with the hospital and medical professional liability insurance sector.

A.M. Best expects the ratings for CHART to remain stable in the medium term. Prospectively, improvement in CHART's capital adequacy as measured by Best's Capital Adequacy Ratio (BCAR) could positively impact the ratings. Conversely, weakening operating trends or any material decline in the company's risk-adjusted capitalization could adversely impact its current ratings. Industry and market factors such as disruption in market dynamics, adverse effects from changes in health care delivery or shifting claim severity and frequency patterns also could pressure the ratings.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at ambest.com/ratings/methodology.

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