Published: February 07, 2011
A.M. Best Withdraws Ratings of Summa Insurance Company and Its Affiliate, SummaCare, Inc.
OLDWICK, N.J. - (BUSINESS WIRE) - A.M. Best Co. has affirmed the financial strength rating (FSR) of
B++ (Good) and issuer credit ratings (ICR) of "bbb+" of Summa
Insurance Company (SIC) and its affiliate, SummaCare, Inc.
(SummaCare). The outlook for all ratings is stable. Both companies are
domiciled in Akron, OH. Concurrently, A.M. Best has withdrawn the
ratings at the company's request and assigned an NR-4 to the FSR and an
"nr" to the ICRs. These rating actions reflect the decision of Summa's
management to withdraw from A.M. Best's interactive rating process.
The ratings reflect the group's steady premium growth, adequate
risk-adjusted capital position and role as a subsidiary of Summa Health
System (SHS), a large integrated health care delivery system.
An offsetting rating factor is that both companies have reported
sizeable operating losses in recent years, with medical loss ratios in
the mid-90% range. These losses had a substantial negative impact on the
group's capital levels. However, in 2009, SHS contributed approximately
$25 million in capital to support SIC and SummaCare. A.M. Best also
notes that the group's net underwriting results improved significantly
as of the third quarter of 2010. Prior group losses were attributed
mainly to the severity of some large claims and excessive outpatient
claims. Management has implemented numerous corrective measures, as well
as cost control initiatives, which appear to be positively impacting
results in 2010. These final ratings do not reflect any changes in
strategy, regulation, operating results or capitalization that may occur
or impact SIC and SummaCare going forward.
The principal methodology used in determining these ratings is Best's
Credit Rating Methodology -- Global Life and Non-Life Insurance Edition,
which provides a comprehensive explanation of A.M. Best's rating process
and highlights the different rating criteria employed. Additional key
criteria utilized include: "Rating Health Insurance Companies" ; "Risk
Management and the Rating Process for Insurance Companies" ; "Update to
BCAR for Life and Health Insurers" ; "Rating
Members of Insurance Groups" ; and "Assessing Country Risk."
Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright (c) 2011 by A.M. Best Company, Inc. ALL RIGHTS
RESERVED.
A.M. Best Co.
Winston Cummings, 908-439-2200, ext. 5755
Financial
Analyst
winston.cummings@ambest.com
or
Joseph
Zazzera, 908-439-2200, ext. 5797
Managing Senior Financial
Analyst
joseph.zazzera@ambest.com
or
Rachelle
Morrow, 908-439-2200, ext. 5378
Senior Manager, Public
Relations
rachelle.morrow@ambest.com
or
Jim
Peavy, 908-439-2200, ext. 5644
Assistant Vice President,
Public Relations
james.peavy@ambest.com
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