AM Best Revises Outlooks to Positive for California Healthcare Insurance Company, Inc., A Risk Retention Group
June 21, 2021by
AM Best revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of California Healthcare Insurance (CHI) Company, Inc., A Risk Retention Group.
The Credit Ratings reflect CHI’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The positive outlooks reflect favorable trends in CHI’s performance relative to similarly assessed peers in the medical professional liability (MPL) insurance industry. Underwriting results have been consistently profitable and exhibited low volatility despite broader deterioration across the MPL market. Premium rebates are distributed to insureds based on CHI’s financial performance, at the discretion of the board of directors. Rebates have proven to be an effective policyholder retention tool, through rewarding member-owners for loyalty and favorable loss experience. Since rebates effectively reduce reported net premiums written and earned, AM Best considers the company’s operating performance before and after rebates, both of which support the revised outlooks. CHI’s business profile continues to be limited, primarily due to product and geographic concentration in professional liability insurance for independent hospitals and other health care entities throughout California.