Unimed gets ratings diagnosis

AM Best has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” for UniMed and say the outlook for both ratings is stable.

The rating affirmations reflect UniMed’s excellent risk-adjusted capitalisation and solid investment results. The ratings also recognise the company’s initiatives to improve underwriting profitability through revising the pricing structures of its poorer performing products, the ratings agency says.

UniMed’s capitalisation on a risk-adjusted basis, as measured by Best’s Capital Adequacy Ratio (BCAR), demonstrates that the company is strongly capitalised. In addition, the premium leverage ratio is maintained at a conservative level of 0.63 times. Although recent business expansion led to an increase in premium risk, UniMed’s underwriting leverage in relation to its book of business remains prudent. "In AM Best’s opinion, UniMed will maintain its capitalisation at a strong level."

With approximately 88% of invested assets as domestic and currency-hedged fixed-interest investments, UniMed’s investment income is of high quality and deemed to be sustainable. It is expected that the company’s underwriting business will continue to be complemented by a solid stream of investment income.