Market Overview

A.M. Best Revises Outlooks to Stable for Bupa Insurance Company


A.M. Best has revised the outlooks to stable from positive and
affirmed the Financial Strength Rating of B++ (Good) and the Long-Term
Issuer Credit Rating (Long-Term ICR) of "bbb+" of Bupa Insurance Company
(Palmetto Bay, FL).

The Credit Ratings (ratings) reflect Bupa Insurance Company's balance
sheet strength, which A.M. Best categorizes as strongest, as well as its
marginal operating performance, limited business profile and appropriate
enterprise risk management.

The revision of the outlooks reflect continued volatility in operating
performance as a result of Bupa Insurance Company's evolving business
model. Operating performance has fluctuated over the years, and
underwriting losses have been reported in 2017 and through mid-2018.
Underwriting results have been impacted negatively by higher
utilization, higher cost claims and expenses, as well as
lower-than-expected premium revenue. In addition, there has been a
negative impact from the recent currency exchange rates fluctuations,
especially as it relates to the Mexican peso where the majority of the
premium is generated. Recent financial results were below the company's
expectations, and five-year average operating ratios also compare
unfavorably with its peer composite. The limited business profile
reflects Bupa Insurance Company's membership decline, which has resulted
from strategic changes in the business model and its impact on the
overall operations.

The ratings affirmations recognize balance sheet strength derived from
risk-adjusted capitalization at the strongest level, which benefits from
a high quality investment portfolio. Bupa Insurance Company continues to
maintain solid liquidity measures and strong financial flexibility. In
addition, the company benefits from the operational and financial
flexibility of its ultimate parent, The British United Provident
Association Limited (BUPA), a global health and care company. BUPA has
moderate financial leverage, and has access to public debt markets. The
ratings takes into consideration the parent's creditworthiness, and
access to BUPA's well-established network and strong operational
capabilities, which further enhances Bupa Insurance Company's
competitive advantage.

This press release relates to Credit Ratings that have been published
on A.M. Best's website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best's
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases

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