A.M. Best Upgrades Ratings of USHEALTH Group, Inc.’s Subsidiaries

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has upgraded the financial strength rating to B+ (Good) from B (Fair) and the issuer credit ratings to “bbb-” from “bb+” of the subsidiaries of USHEALTH Group, Inc.: Freedom Life Insurance Company of America and National Foundation Life Insurance Company (collectively referred to as USHEALTH Group). The outlook for each rating remains positive. All companies are domiciled in Fort Worth, TX.

The rating upgrades reflect USHEALTH Group’s continued strong operating results, substantial revenue growth in Affordable Care Act (ACA)-exempt supplemental health lines of business, improved risk–adjusted capitalization and a change in financial leverage structure. USHEALTH Group’s earnings have increased significantly over the past four years, with its biggest increase in 2015, driven primarily by improved underwriting results. In 2015, the group experienced substantial premium growth, especially in its ancillary lines of business. USHEALTH Group remains focused on further expanding its ancillary product offerings, developing captive distribution in new geographies and maintaining long-term customer relationships as a means of increasing its scale and brand recognition in the marketplace. In addition, during 2015, the holding company significantly improved its financial flexibility through an increasing line of credit and by paying off two term loans. Additionally, the positive outlooks reflect A.M. Best’s opinion that the USHEALTH Group is positioned for future profitable growth.

Partially offsetting these positive rating factors are the company’s lack of scale and growing competitive pressure in the ACA-exempt product space. Additionally, future revenue growth is tied to USHEALTH Group’s ability to grow its captive agency force, which may increase USHEALTH Group’s reliance on a line of credit used to pay agent commission advances.

This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.

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A.M. Best

Craig Draghi, +1 908-439-2200, ext. 5164

Financial Analyst

craig.draghi@ambest.com

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Christopher Sharkey, +1 908-439-2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

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Doniella Pliss, +1 908-439-2200, ext. 5104

Managing Senior Financial Analyst

doniella.pliss@ambest.com

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Jim Peavy, +1 908-439-2200, ext. 5644

Assistant Vice President, Public Relations

james.peavy@ambest.com

Source: A.M. Best