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AM Best Places Credit Ratings of AvMed, Inc. Under Review With Developing Implications

December 16, 2021 GMT

OLDWICK, N.J.--(BUSINESS WIRE)--Dec 16, 2021--

AM Best has placed under review with developing implications the Financial Strength Rating of B (Fair) and Long-Term Issuer Credit Rating of “bb” (Fair) of AvMed, Inc. (AvMed) (Miami, FL).

The assignment of under review with developing implications status reflects the sizable operating loss and the decline in statutory capital and surplus through Sept. 30, 2021, with both falling below AvMed’s forecast and AM Best’s expectations. On Sept. 30, 2021, AvMed reported net losses of $17.5 million, which were primarily driven by higher COVID-19-related hospitalization and testing costs incurred during the third quarter. In addition, AvMed carried higher reserves through the same period, which also contributed to the unfavorable net results. While the company expects to recuperate some of the losses due to claims over-payments discovered through retrospective provider reviews, the updated full year forecast is still projecting a net loss as compared with anticipated gains, per prior forecasts provided to AM Best.

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Furthermore, the level of capital and surplus of AvMed fell from $125.6 million to $104.5 million through Sept. 30, 2021, which was significantly lower than the projected full-year statutory capital and surplus, previously expected to increase. The company expects statutory capital will not meet the full year expectation.

The ratings will remain under review with developing implications while AM Best has further discussions with the company’s management team related to its capital plan and operating earnings. Negative rating action could occur if AvMed’s operating earnings continue to decline and if capital and surplus further deteriorates.

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This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20211216005838/en/

CONTACT: Antonietta Iachetta

Senior Financial Analyst

+1 908 439 2200, ext. 5792

antonietta.iachetta@ambest.comJoseph Zazzera, MBA

Director

+1 908 439 2200, ext. 5797

joseph.zazzera@ambest.comChristopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comJim Peavy

Director, Communications

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

KEYWORD: EUROPE UNITED STATES NORTH AMERICA NEW JERSEY

INDUSTRY KEYWORD: INSURANCE PROFESSIONAL SERVICES

SOURCE: AM Best

Copyright Business Wire 2021.

PUB: 12/16/2021 10:50 AM/DISC: 12/16/2021 10:51 AM

http://www.businesswire.com/news/home/20211216005838/en