A.M. Best Upgrades Ratings of Medico Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has upgraded the financial strength rating to B+ (Good) from B- (Fair) and issuer credit rating to “bbb-” from “bb-” of MedicoInsurance Company (Medico) (Omaha, NE). Both ratings have been removed from under review with positive implications and assigned a stable outlook.

Medico’s ratings had been placed under review following the announcement of American Enterprise Group, Inc.’s (American Enterprise) (Des Moines, IA) intent to have Medico join theAmerican Enterprise Mutual Holding Company organization.

The rating upgrades reflect Medico’s merger with American Enterprise effective July 1, 2012 and the subsequent capital contribution of $25 million bolstering its risk-adjusted capital position. The merger will provide an expense synergy for Medico and a sizable growth opportunity in the senior market for American Enterprise.

A.M. Best believes Medico will benefit from being part of a stronger organization with considerable financial resources and a recognized name in the Medicare supplement market. Medico will continue to operate as a single entity in Omaha under its present name and will continue to sell Medico products through its independent agents.

Positive rating actions could occur with a successful integration of Medico into the American Enterprise group along with improvement in its earnings. Negative rating actions could occur if there is deterioration in Medico’s capital due to operating losses or a decrease in the financial support from American Enterprise.

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 www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com

Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Jeffrey Lane
Managing Senior Financial Analyst
908-439-2200, ext. 5567
jeffrey.lane@ambest.com
or
Sally Rosen
Managing Senior Financial Analyst
908-439-2200, ext. 5280
sally.rosen@ambest.com
or
Rachelle Morrow
Senior Manager, Public Relations
908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
908-439-2200, ext. 5644
james.peavy@ambest.com

Source: A.M. Best Co.