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A.M. Best Withdraws Ratings of Robert Wood Johnson University Hospital at Hamilton SAAML CONTACTS:
FOR IMMEDIATE RELEASE OLDWICK, NEW JERSEY, U.S.A., Feb. 18, 2010—A.M. Best Co. has downgraded the financial strength rating (FSR) to B (Fair) from B+ (Good) and issuer credit rating (ICR) to “bb” from “bbb-” of Robert Wood Johnson University Hospital at Hamilton SAAML (RWJUH Hamilton-SAAML) (Hamilton, Bermuda). The outlook for both ratings is stable. Concurrently, A.M. Best has withdrawn the ratings at the company’s request and assigned a category NR-4 to the FSR and “nr” to the ICR. These rating actions reflect RWJUH Hamilton-SAAML’s weak capitalization level due to a significant decrease in its surplus caused by the payment of a large dividend. The current capitalization level is not supportive of the previous rating level. The ratings also take into consideration the financial position and recent challenges of its ultimate parent, RWJUH Hamilton, as well as, RWJUH Hamilton-SAAML’s limited business scope, regulatory constraints, fluctuating results and high retention levels relative to surplus. Through the later part of 2009, RWJUH Hamilton reported losses, leading to a modest decline in its net asset base. This is the second year the hospital has reported unfavorable operating results. Additionally, RWJUH Hamilton maintains a high leverage position, combined with relatively low coverage and liquidity levels. The hospital also has reported declines in several of its core operating metrics, including the number of procedures performed and total admissions. Partially offsetting these negative rating factors are RWJUH Hamilton-SAAML’s sound risk management program, experienced management team and its status within the Robert Wood Johnson Health System. RWJUH Hamilton-SAAML’s risk management program maintains a high level of sophistication, which includes a bio-identification program, quarterly claim reviews, significant physician involvement in educational programs and clinical outcome satisfaction surveys. Additionally, the ratings recognize the role RWJUH Hamilton-SAAML serves in providing hospital professional and general liability coverage to participating physicians within this facility. A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States and throughout the world. For current Best’s Ratings and independent data on the captive and alternative insurance market, please visit www.ambest.com/captive. The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. ### |
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