AM Best Upgrades Issuer Credit Rating of AvMed, Inc.

OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “b+” from “b” and affirmed the Financial Strength Rating of C++ (Marginal) of AvMed, Inc. (AvMed) (Miami, FL). The outlook of these Credit Ratings (ratings) has been revised to positive from stable.

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

The revision of the outlooks to positive is based on the improvement in risk-adjusted capitalization to the adequate level from weak, as measured by Best Capital Adequacy Ratio (BCAR). AvMed reported higher underwriting gains and net earnings in each of the past two years, which have contributed to growth in its absolute level of capital and surplus. AvMed’s focus on profitability in various segments resulted in lower premium, which when coupled with higher capital, has also led to a stronger level of risk-adjusted capitalization, and improvement in its BCAR. The company expects this trend to continue in 2020 with premium continuing to moderate; however, net results are expected to decline. AM Best will closely monitor AvMed’s capital trends, with the expectation that they remain within the range for the ratings.

AvMed’s operating performance is assessed as marginal, although operating results have improved vastly over the past two years. During 2019, AvMed initiated significant improvements to its information technology infrastructure, which has been outsourced; AM Best expects that the completion of this project will create operating efficiencies. Despite the large commitment spend to the information technology transformation, AvMed reported higher underwriting gains and net income in 2019 mainly from more favorable claims experience. However, the company expects the information technology transformation project to cause substantial moderation in earnings for 2020. AM Best expects that earnings for 2020 will be within the projections provided by senior management.

The company’s business profile remains limited as it remains pressured to gain profitable market share, while competing against larger local and national players in Florida.

Based on the improvement in operational and financial controls, the company’s ERM has been upgraded from marginal to appropriate. AvMed has made significant progress from prior years with the assistance of an external consultant several years ago, which has helped with underwriting practices and refinements, as evidenced by higher net operating results and improving capital position in recent years. Furthermore, AvMed’s ERM program is now more formalized, with a developed governance structure, process and controls, senior leadership involvement and support. The ERM program includes robust risk appetite and tolerances, as well as risk identification and reporting tools, which are embedded in AvMed’s operations.

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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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Antonietta Iachetta
Senior Financial Analyst
+1 908 439 2200, ext. 5792

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Joseph Zazzera, MBA
+1 908 439 2200, ext. 5797

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644

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