A.M. Best Downgrades Issuer Credit Ratings of Assurant, Inc.’s Health Insurance Subsidiaries; Places Ratings Under Review W...

A.M. Best has downgraded the issuer credit ratings to “bbb” from “bbb+” and affirmed the financial strength rating of B++ (Good) of the health insurance subsidiaries of Assurant, Inc. (Assurant) (New York, NY) [NYSE: AIZ]: Time Insurance Company (TIC) and John Alden Life Insurance Company (John Alden). All ratings have been placed under review with negative implications. TIC and John Alden are domiciled in Milwaukee, WI and are collectively referred to as Assurant Health.

The actions follow Assurant’s recent announcement that it has concluded its review of strategic alternatives for its health business and will exit the health insurance market by 2016. The cost estimates associated with the market exit will be in the range of $175-250 million and include premium deficiency reserves, severance and retention, and other transaction costs – most of which are expected to flow through TIC’s financial statements. A.M. Best’s ratings on Assurant’s other subsidiaries, including those parts of its employee benefits segment that is currently up for sale, remain unchanged.

The under review status reflects the uncertainty related to the future capitalization of Assurant Health, given the disclosed cost estimates and anticipated operating losses for the remainder of 2015. A.M. Best notes that Assurant Health has historically benefited from sizable cash infusions from Assurant, most recently, a $30 million contribution in April 2015. Although A.M. Best maintains its perspective that Assurant will continue to support its obligations to customers and policyholders during the process, it is currently unclear what level of risk-adjusted capitalization will be maintained. The under review status will be resolved once A.M. Best has a clearer picture as to the capital positions of TIC and John Alden.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Rating Members of Insurance Groups
• Understanding BCAR for U.S. and Canadian Life/Health Insurers

This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. BestMichael Adams, 908-439-2200, ext. 5133Senior Financial [e-mail] Edelsberg, 908-439-2200, ext. 5182Vice [e-mail] Sharkey, 908-439-2200, ext. 5159Manager, Public [e-mail] Peavy, 908-439-2200, ext. 5644Assistant Vice President, Public [e-mail]