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Insurance ratings actions: Fitch affirms UnitedHealth, AIG

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Insurance ratings actions: Fitch affirms UnitedHealth, AIG

S&P Global Market Intelligence compiles ratings actions in the insurance space daily through 5 p.m. ET. Actions after 5 p.m. ET will be included in the following day's roundup.

U.S. and Canada

Fitch Ratings affirmed the AA- insurer financial strength ratings of UnitedHealth Group Inc. subsidiaries UnitedHealthcare Insurance Co., UnitedHealthcare Insurance Co. of Illinois, UnitedHealthcare Insurance Co. of New York, Sierra Health & Life Insurance Co. Inc., Health Plan of Nevada Inc., UnitedHealthcare of Florida Inc., PacifiCare of Arizona Inc., Oxford Health Insurance Inc., Oxford Health Plans of New York Inc., UnitedHealthcare of Wisconsin Inc., UnitedHealthcare Benefits of Texas Inc., UHC of California, PacifiCare Life & Health Insurance Co. and UnitedHealthcare Plan of the River Valley Inc.

The long-term issuer default rating of A and the short-term issuer default rating of F1 of UnitedHealth Group were also affirmed.

The outlook is stable.

The ratings action on UnitedHealth Group reflects the company's strong capitalization and leverage profile, as well as its very strong financial performance, according to Fitch.

UnitedHealth Group's ratings are supported by the company's very strong operating margins and overall profitability, in addition to the inherent strength and diversity of its health benefits and health services operations, Fitch said.

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Fitch affirmed the long-term issuer default rating of A- of American International Group Inc. and AIG Life Holdings Inc., the insurer financial strength ratings of A of the property and casualty insurance subsidiaries, and the insurer financial strength ratings of A+ of the life insurance subsidiaries.

The property and casualty insurance subsidiaries are AIU Insurance Co., American Home Assurance Co., AIG Assurance Co., AIG Property Casualty Co., AIG Specialty Insurance Co., Commerce & Industry Insurance Co., Granite State Insurance Co., Illinois National Insurance Co., Insurance Co. of the State of Pennsylvania, Lexington Insurance Co., National Union Fire Insurance Co. of Pittsburgh Pa. and New Hampshire Insurance Co.

The life insurance subsidiaries are AGC Life Insurance Co., American General Life Insurance Co., The Variable Annuity Life Insurance Co. and United States Life Insurance Co. in the City of New York.

The outlook of the ratings of AIG and the property and casualty units remains negative, while the outlook of the ratings of the life insurance subsidiaries, as well as AIG Life Holdings, is stable.

Fitch also affirmed the insurer financial strength rating of A of Validus Reinsurance Ltd. The outlook of the rating was revised to negative from stable.

The issuer default rating of A- of Validus Holdings Ltd. was also affirmed. The outlook is negative.

The ratings actions come after the rating agency's review considering AIG's full-year 2018 financial results. The negative outlook for the property and casualty insurance subsidiaries and AIG considers the unfavorable underwriting and operating performance within the property and casualty segment, which lead to weaker consolidated financial results and deterioration in AIG's interest coverage, Fitch said.

The ratings of the property and casualty units reflect AIG's unique market position in the global insurance market, taking into consideration its absolute size, underwriting capabilities and strong consolidated capital adequacy. The life insurance units' ratings consider AIG's strong capitalization, diversified business mix with major market share in a number of product lines, as well as its strong and stable financial performance, according to Fitch.

The negative outlook for Validus Re shows the decision to group the rating with the other general insurance subsidiary operations of AIG, fitting to the company's segment reporting.

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Kroll Bond Rating Agency assigned insurance financial strength ratings of A- to AmeriTrust Group Inc.'s insurance underwriting entities, Star Insurance Co., Century Surety Co., Ameritrust Insurance Corp., Williamsburg National Insurance Co. and ProCentury Insurance Co.

The rating agency also assigned a BBB- issuer rating to AmeriTrust.

The outlook of these ratings is stable.

The ratings of AmeriTrust reflect its favorable operating metrics, driven by strong surplus growth and targeted premium decreases since 2015 to de-emphasize noncore business lines, according to the agency.

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S&P Global Ratings downgraded the issuer credit rating to BB+ from BBB- of Magellan Health Inc. The outlook is stable.

The ratings action considers the company's significant earnings underpeformance in 2018, which led to significantly elevated leverage levels, S&P Global Ratings said.

The outlook takes into consideration S&P Global Ratings' expectation of modest earnings improvement and deleveraging in the next 12 to 24 months.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.

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