OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of C (Weak) and the Long-Term Issuer Credit Rating of “ccc” (Weak) of Friday Health Plans of Colorado, Inc. (Friday Health) (Alamosa, CO). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn the ratings as the company has requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect Friday Health’s balance sheet strength, which AM Best assesses as very weak, as well as its marginal operating performance, limited business profile and weak enterprise risk management.
Friday Health’s balance sheet fundamentals remain unfavorable and its risk-adjusted capitalization, as measured by Best Capital Adequacy Ratio (BCAR), is very weak as absolute capital and surplus levels have been strained by operating losses. However, Friday Health’s parent continues to support the company through capital contributions ensuring that regulatory statutory minimum requirements are maintained. Operating results remained depressed in 2021 as the company continued to expand. The company reported net operating losses of $13.8 million due to increased medical loss and administrative ratios. The business profile is limited as the company is mainly concentrated in the individual exchange business in select service areas in Colorado and New Mexico, which limits its geographic reach. The company is in the process of evaluating a market entrance into additional service areas. Friday Health is working to develop a more comprehensive risk management processes to support its current operations and business expansion strategy.
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