S&P Global Market Intelligence compiles ratings actions in the insurance space daily through 5:30 p.m. ET. Actions after 5:30 p.m. ET will be included in the following day's roundup.
Managed care
S&P Global Ratings downgraded Molina Healthcare Inc.'s long-term issuer credit and senior unsecured debt ratings to BB- from BB, with a stable outlook.
S&P said the downgrade reflects Molina's diminishing geographic footprint and top line revenue in its Medicaid segment, since the company lost bids to retain two of its significant Medicaid contracts in New Mexico and Florida. The company faces operational challenges building out its care-management model to reduce its overall medical loss ratios in certain markets to improve its earnings in 2018 to 2019, the rating agency said.
Molina's new management team outlined a clear turnaround strategy with a company-wide restructuring and expense-cutting program, but S&P said it is uncertain about the ultimate pace and execution of this strategy in 2018.
Property and casualty
Moody's affirmed the A2 insurance financial strength ratings of Aspen Insurance UK Ltd. and Aspen Bermuda Ltd.
The outlook has been changed to negative from stable.
Moody's said the change in outlook reflects the deterioration of Aspen Insurance Holdings Ltd.'s financial strength, including declining profitability driven by margin erosion and a sharp decline in shareholder equity caused by underwriting losses from the second half of 2017.
Aspen suffered heavy catastrophe losses during the third quarter of 2017, taking a $360 million pretax catastrophe loss charge primarily due to hurricanes Harvey, Irma and Maria, and earthquakes in Mexico. The company anticipates about $135 million in pretax losses, net of reinsurance and reinstatement premiums, related to wildfires in California in the fourth quarter of 2017.
Following the losses in the second half of last year, Moody's said it believes the group has limited remaining capital flexibility at its current capital level. However, the rating agency does not expect Aspen's economic solvency position to have deteriorated significantly due to risk-mitigating actions recently implemented by management to reduce the group's solvency capital requirement.
Moody's said it expects Aspen to benefit from stronger pricing for 2018 reinsurance but cautioned that U.S. tax reform may place more pressure on the company's profitability over time.
_____________________________
A.M. Best affirmed the financial strength rating of A (Excellent) and the long-term issuer credit ratings of "a" for Grinnell Mutual Reinsurance Co. and its subsidiary, Grinnell Select Insurance Co.
It also revised the outlook to positive from stable for the long-term issuer credit rating. The outlook of the financial strength rating remains stable.
The positive outlook reflects the group's improved operating performance in recent years due to what A.M. Best called "significant improvement" in underwriting practices on the assumed book of business. Strong underwriting income and steady net investment income have contributed to the healthy surplus growth of the past five years, the rating agency noted.
A.M. Best said Grinnell's policyholder surplus remains susceptible to natural catastrophes because of the geographic concentration within its property lines business.
_____________________________
A.M. Best revised the outlooks to positive from stable and affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit ratings of "a-" of Union Mutual Fire Insurance Co.; its wholly owned subsidiary, New England Guaranty Insurance Co. Inc.; and its mutual affiliate, Community Mutual Insurance Co.
A.M. Best said the revised outlooks reflect significant improvement in underwriting results in recent years that have benefited from refinement in pricing models, a more sophisticated policy administration system, stricter underwriting guidelines and effective agency management.
Although currently assessed at adequate, A.M. Best expects sustained improvement in Union Mutual's operating performance.
_____________________________
A.M. Best affirmed the financial strength rating of A++ (Superior) and the long-term issuer credit ratings of "aa+" of the members of The Hartford Steam Boiler Group, with a stable outlook.
The affected members are Hartford Steam Boiler Inspection & Insurance Co., Hartford Steam Boiler Inspection & Insurance Co. of Connecticut, Boiler Inspection & Insurance Co. of Canada, HSB Specialty Insurance Co. and HSB Engineering Insurance Ltd.
The ratings recognize the group's superior level of risk-adjusted capitalization, consistently favorable earnings and unique market profile. The affirmations also reflect the group's synergies with Munich Reinsurance America Inc. and its ultimate parent Munich Reinsurance Co., A.M. Best said.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.
