A.M. Best Upgrades Rating of Connecticut Medical Insurance Company; Assigns Issuer Credit Rating
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OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best Co. has upgraded the financial strength rating (FSR) to A- (Excellent) from B++ (Good) and assigned an issuer credit rating (ICR) of “a-â€? to Connecticut Medical Insurance Company (CMIC) (Glastonbury, CT). The outlook for the FSR has been revised to stable from positive, and the outlook assigned to the ICR is stable.
The ratings reflect CMIC’s improved risk-adjusted capitalization and underwriting performance, its favorable return measures and conservative loss reserving philosophy. Management’s actions to achieve rate adequacy, improve its book of business and build conservatism in its loss reserves has resulted in the generation of operating profitability and a strengthened capital position. The implementation of significant rate increases in addition to the strict enforcement of underwriting standards has resulted in a substantial decrease in members from prior years, primarily those with higher than expected losses. CMIC now maintains a more balanced mix of medical specialties at a more adequate rate level.
These positive rating factors are partially offset by the inherent challenges associated with CMIC largely being a single state, monoline medical malpractice insurer, particularly as they relate to price competition, legislative (tort) reform, loss cost trends and regulatory challenges.
The ratings also recognize the large swing in earnings and overall poor underwriting results over the long term, albeit improved in the recent period. The outlook is based on A.M. Best’s expectation that CMIC will sustain profitability and risk-adjusted capitalization as well as maintain rate and reserve adequacy.
For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
