|[July 31, 2014]
A.M. Best Assigns Ratings to Texas Hospital Insurance Exchange
OLDWICK, N.J. --(Business Wire)--
A.M. Best has assigned a financial strength rating of B+ (Good)
and an issuer credit rating of "bbb-" to Texas Hospital Insurance
Exchange (THIE) (Austin, TX). The outlook assigned to both ratings
The ratings of THIE are reflective of its supportive risk-adjusted
capitalization, operating profitability and judicious reserving
practices. These positive rating factors are partially offset by THIE's
narrow geographic spread of risk, highly competitive operating
environment and elevated expense ratio levels. The outlook is based on
the company's prospects of continued operating profitability through
price and reserve adequacy while maintaining supportive capital.
The ratings also acknowledge THIE's business focus as it provides
commercial insurance products to small and rural Texas hospitals. This
focus has led to high policyholder retention levels, favorable operating
results and stronger capitalization. THIE has also benefited from
prior-yar loss reserve releases over the past few years as loss trends
have been better than what were originally anticipated.
However, the company writes only in Texas, subjecting its results to
changes in the economic, regulatory and judicial environments,
competitive market conditions, as well as changes in medical
professional and health care market dynamics throughout the state.
Factors that could lead to positive rating actions include sustained
favorable performance on an underwriting and operating basis, consistent
generation of surplus and the maintenance of strong capitalization.
Negative rating actions could occur if risk-adjusted capitalization
decreases or should a trend of unfavorable earnings from underwriting or
investment losses develop.
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.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
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