AM Best Upgrades Credit Ratings of Texas Hospital Insurance Exchange

AM Best Upgrades Credit Ratings of Texas Hospital Insurance Exchange


OLDWICK, N.J., January 18, 2022—AM Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” (Excellent) from “bbb+” (Good) of Texas Hospital Insurance Exchange (THIE) (Austin, TX). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect THIE’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).

The upgrades reflect an improvement in the balance sheet strength assessment to the higher end of the strong category. THIE maintains the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The company has reported solid surplus growth over the most recent five-year period, despite ongoing cash distributions to policyholders. Through nine months of 2021, these trends persisted. Underwriting leverage metrics are very low and compare favorably with the commercial casualty composite average. Loss reserve development continues to be redundant, albeit with less magnitude in more recent years. Offsetting factors include limited scale and financial flexibility as a standalone reciprocal. In addition, the majority of surplus consists of subscribers’ savings account balances, which are subject to be returned to withdrawn members beginning five years after departing from the reciprocal exchange.

THIE’s operating performance has been strong and is the primary driver of surplus growth. The limited business profile assessment primarily reflects product and geographic concentration risks due to THIE’s niche focus on writing workers’ compensation, professional liability and related coverages for small rural hospitals in Texas. An appropriate ERM program is in place, with well-identified key risks and corresponding mitigation strategies.

Negative rating action could result from an unfavorable trend in operating performance due to an increase in claim frequency, severity or adverse loss development.


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

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