A.M. Best Confirms Ratings of Medco Containment Company and Medco Containment Insurance Company of New York [Professional Services Close – Up]

Proquest LLC

A.M. Best Co. reported that it has affirmed the financial strength rating of A- and issuer credit ratings of "a-" of Medco Containment Life Insurance Company (MCLIC) and Medco Containment Insurance Company of New York (MCICNY).

The outlook for all ratings is stable.

The Company noted that the ratings are based on MCLIC and MCICNY's medium-term growth, favorable operating results and capitalization. Growth in net premiums written at the two companies has been exceptional over the past few years, and aggregate underwriting results have been stable since 2008. Capital levels at the companies are more than adequate for their current level of business. Capital growth had been supported in the past by their former parent, Medco Health Solutions, Inc.; however, this entity was acquired on April 2, by Express Scripts Holding Company, and A.M. Best expects this support to continue under the new parent company.

MCLIC and MCICNY have very limited product portfolios, consisting primarily of Medicare Part D business that is offered to Medco Health Solutions' clients and individuals, as well as automatic enrollment of individuals eligible for Medicare and Medicaid in various Centers for Medicare and Medicaid Services (CMS) regions. All long-term revenues are expected to be derived from Medicare Part D products. This narrow focus on Medicare poses a market concentration risk. A.M. Best said it expects that MCLIC and MCICNY will focus their business in support of Medco Health Solutions' clients under the guidance of Express Scripts.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides an explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process.

A.M. Best Company is an insurance rating and information source.