Rating Outlooks for United Equitable, American Heartland Insurance Revised to Negative

AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of C++ (Marginal) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “b” for United Equitable Insurance Co. (United Equitable).

Concurrently, AM Best has revised the outlook to negative from stable for the Long-Term ICR and affirmed the FSR of C- (Weak) and the Long-Term ICR of “ccc-” of American Heartland Insurance Co. (American Heartland). The outlook for the FSR is stable.

Both companies are property/casualty insurance company subsidiaries of United Equitable Insurance Group Ltd., which also operates a premium finance company, Lakeshore Finance Co. The organizations are headquartered in Morton Grove, Ill.

United Equitable Insurance has been in business since 1959; American Heartland was established in 1994.

The ratings of United Equitable reflect its balance sheet strength, which AM Best categorizes as weak, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).

The ratings of American Heartland reflect its balance sheet strength, which AM Best categorizes as very weak, as well as its adequate operating performance, limited business profile and marginal ERM.

The revised outlooks to negative from stable for United Equitable and the revised Long-Term ICR outlook for American Heartland are based on continued pressure on their balance sheet strength assessments through third-quarter 2020, driven by significant recent growth and equity market volatility.

Risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), has declined to the lower end of the weak range for both companies.

The stable FSR outlook for American Heartland is based on AM Best’s expectation that the company’s operating performance will remain adequate over the intermediate term, supported by its prudent underwriting practices.

Source: AM Best