A.M. Best Upgrades Credit Ratings of Lewer Life Insurance Company

A.M. Best has upgraded the Financial Strength Rating to B+ (Good)
from B (Fair) and the Long-Term Issuer Credit Rating (Long-Term ICR) to
“bbb-” from “bb+” of Lewer Life Insurance Company (Lewer Life)
(Kansas City, MO). The outlook of these Credit Ratings (ratings) has
been revised to stable from positive.

The ratings reflect Lewer Life’s balance sheet strength, which A.M. Best
categorizes as very strong, as well as its adequate operating
performance, very limited business profile and marginal enterprise risk
management.

The rating upgrades reflect Lewer Life’s long-established niche of more
than 25 years in the student health insurance marketplace, favorable
operating results and strongest risk-adjusted capitalization, as
measured by Best’s Capital Adequacy Ratio. Lewer Life generates the
majority of its net premium revenue from reinsuring international
student insurance business, which is underwritten by two carriers and
marketed and administered by its affiliate, The Lewer Agency, a
nationally licensed managing general agency and a third-party
administrator that has provided favorable underwriting.

Lewer Life has reported increased levels of profitability over the past
two years as it strategically exited from its relationship with a single
carrier and negotiated an arrangement with two carriers offering
Affordable Care Act-exempt products, which somewhat mitigate
concentration and regulatory risks. Net income has been the primary
contributor to capital growth over the past two years. In addition, the
company has been extended a sizable line of credit and has no
outstanding balance. However, the absolute level of capital and surplus
remains modest, the company remains very dependent on its reinsurance
relationships and the vast majority of premium revenue was received from
two ceding companies. Furthermore, Lewer Life’s future expansion
potential may be challenged as the number of international students in
the United States has not grown in recent years, pressured by economic
and political developments.

This press release relates to Credit Ratings 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 see A.M. Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating
Action Press Releases.

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

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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