OLDWICK, N.J.--(BUSINESS WIRE)--#insurance--AM Best has removed from under review with positive implications and upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to "bbb+" (Good) from "bbb" (Good) and affirmed the Financial Strength Rating of B++ (Good) of Physicians Health Plan of Northern Indiana, Inc. (PHP) (Fort Wayne, IN). The outlook assigned to these Credit Ratings (ratings) is positive.
The ratings reflect PHP's balance sheet strength, which AM Best assesses as strong, its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).
The ratings actions follow the recent announcement by Priority Health that it has completed its acquisition of PHP. The upgrade to PHP's Long-Term ICR and positive outlook reflect enhancement from the financial and operational support implicitly provided by its new intermediate parent, Priority Health. Priority Health is a Grand Rapids, MI-based health plan owned by Corewell Health, a non-profit healthcare system.
The ratings also consider the opportunity for PHP to build additional scale in its existing businesses, as its current limited business has been adversely impacted by administrative expenses and competition in recent years. This has created challenges in its two core commercial business segments and challenged its ability to price products to compete effectively. In addition, PHP will potentially be able to enter new health lines of business over time, such as Medicare Advantage, Medicaid government lines of business, and the possible re-entry into the individual medical segment, which would further diversify its business profile. AM Best anticipates that PHP will benefit from the enhanced financial flexibility, as well as product diversity and innovation afforded by being a part of a larger and stronger organization.
In the near-term, AM Best will monitor the extent to which these opportunities and potential business and strategic enhancements will positively impact PHP's rating fundamentals over the coming years, particularly its operating performance and capital support as required to support its strategic plans.
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 Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
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