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AM Best Upgrades Credit Ratings of Liberty Union Life Assurance Company

AM Best has upgraded the Financial Strength Rating to B+ (Good) from B (Fair) and the Long-Term Issuer Credit Rating to “bbb-” (Good) from “bb+” (Fair) of Liberty Union Life Assurance Company (Liberty Union Life) (Troy, MI). The outlook of these Credit Ratings (ratings) is stable.

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

The ratings upgrade reflects AM Best’s view of Liberty Union Life’s ERM program, which is considered appropriate for its size. Liberty Union Life’s ERM program has continuously improved over the past few years. Liberty engaged with an external consultant in 2018 to perform an ERM maturity assessment and improve this framework, as well as an external information technology auditor to verify its cyber security. As a result, management has identified and assessed its most significant risks and risk mitigating factors/controls in a recently developed risk register. The company continues to use outside vendors to evaluate its system and report weaknesses. Liberty Union Life's risk appetite is prefaced on its ability to mitigate risks, as demonstrated by its strategic pivot to lower risk self-insured, medical stop-loss products from higher risk fully insured major medical products in recent years.

Liberty Union Life’s balance sheet strength is supported by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and favorable liquidity metrics. However, AM Best notes the company’s relatively modest level of absolute capital and surplus, as well as its limited financial flexibility. The company’s operating performance has historically been driven by consistent, albeit modest, operating earnings. However, the company did report its first operating loss since 2009, which was driven by a higher frequency in large claims. Liberty Union Life expects to return to profitability in 2024.

Liberty Union Life continues to be challenged by a limited business profile, reflecting its nominal market share within its operating area, a business concentration in its small group medical stop-loss product and geographic concentration in Michigan, as well as highly competitive medical stop-loss and supplemental accident and health markets, which include larger national and regional health carriers.

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 Performance Assessments, 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

Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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