AM Best Revises Issuer Credit Rating Outlook to Positive for Liberty Union Life Assurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has revised the Long-Term Issuer Credit Rating (Long-Term ICR) outlook to positive from stable and affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term ICR of “bb” of Liberty Union Life Assurance Company (Liberty Union Life) (Troy, MI). The outlook for the FSR remains stable.

The ratings reflect Liberty Union Life’s balance sheet strength, which AM Best categorizes as adequate, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.

The revised Long-Term ICR outlook for Liberty Union Life reflects significantly higher operating and net income reported in 2018, driven by a sizable release of excess reserves that materially strengthened the company’s absolute capital and surplus, as well as its estimated Best’s Capital Adequacy Ratio. However, AM Best notes that the company’s level of absolute capital and surplus remains relatively modest.

Liberty Union Life continues to be challenged by a limited business profile, reflecting its modest market share, a business concentration in its small group fully funded medical stop loss product and geographic concentration in Michigan, as well as highly competitive major medical and supplemental accident and health markets, which include larger national and regional health carriers.

Liberty Union Life also has been challenged by overall marginal operating performance in recent years, reflecting a downward trend in net premium that has been driven by terminations of medical stop-loss business due to rate increases and the runoff of its closed major medical and mini-med segments. Generally unfavorable underwriting experience during this period has resulted in nominal operating gains and net income, as well as modest operating and net losses in 2017. Additionally, the company’s return on equity and return on revenue metrics have been below industry averages.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Brian Virostek

Financial Analyst

+1 908 439 2200, ext. 5531

[email protected]

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

[email protected]

Jeff Lane

Senior Financial Analyst

+1 908 439 2200, ext. 5567

[email protected]

Jim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

[email protected]

Source: AM Best