Oldwick, New Jersey – October 23, 2020 – AM Best has assigned a Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Rating of “a-” to Coefficient Insurance Company (headquartered in South San Francisco, CA) (Coefficient). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Coefficient’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. Coefficient is a newly formed company that is wholly owned by Verily Life Sciences LLC (Verily). Verily is majority owned and consolidated by Alphabet, Inc. (Alphabet). Swiss Re Corporate Solutions Ltd (Swiss Re) has entered into a definitive agreement to take a minority interest in Coefficient, subject to regulatory approval and the satisfaction of certain customary closing conditions. The ratings also consider the company’s strategic importance to and the support it receives from Verily and Alphabet, and is anticipated to receive from its expected minority shareholder, Swiss Re.

The primary product focus of the organization will be in the stop-loss insurance market, where Coefficient expects to leverage the innovative capabilities of Verily and grow its Precision Risk stop-loss product in the self-funded health insurance market segment. Precision Risk assigns members of a group into one of 22 deductibles with a wide range in attachment points. The partnership with Swiss Re will bring established capabilities to Coefficient, and AM Best expects this relationship to foster strength in distribution and bring innovative solutions to the broad national market. The team assembled to manage Coefficient is deeply experienced with prior leadership roles and strong knowledge of the health care and health insurance landscape. They also have brought in experienced service support to administer and aid in executing upon their plan to grow and expand group stop-loss business for companies with self-funded health insurance employer plans.

As Coefficient increases sales volume, AM Best expects Coefficient’s risk-adjusted capital levels to decline with premium expansion, and Verily is expected to explicitly support this growth as needed with capital to maintain Coefficient’s assessed risk-adjusted capital level of strong.

As a startup company, Coefficient is expected to face challenges from market pressure and barriers may prevent expansion. In addition to the economic challenges and social constraints during the pandemic, insurers may be faced with regulatory pressure, difficulty achieving market acceptance and changing demographics, affecting market behaviors. AM Best will monitor Coefficient’s ability to adapt and respond to any of these changes and their ability to respond without operational or financial disruption.


About AM Best

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.

Columbus, Ohio – Oct. 8, 2020 – Coefficient Insurance Company, a subsidiary of Verily Life Sciences, an Alphabet company, has earned a Financial Stability Rating® (FSR) of Aʺ, A Double Prime, Unsurpassed, from Demotech, Inc., the first rating agency to review and rate independent, regional, and specialty carriers.

As a tangible manifestation of their effort to assist self-funded employers facing rising and unpredictable healthcare costs, Coefficient will leverage Verily Life Science’s strengths integrating hardware, software, and data science. Swiss Re Corporate Solutions, the commercial insurance unit of Swiss Re Group, has entered into a proposed transaction with Coefficient and Verily, which involves collaboration by Swiss Re Corporate Solutions by providing its risk knowledge, distribution capabilities, and reputation as a leader in the employer stop-loss market. The proposed transaction remains subject to closing conditions, including regulatory approvals.

Joseph Petrelli, ACAS, MAAA (MBA), President and Co-founder, Demotech, who coordinated the assignment of the FSR by Demotech, observed: “I have been in the insurance industry since 1974 and led Demotech to be the first to review and rate independent, regional, and specialty carriers, back in 1989. Over the ensuing thirty-one years, we reviewed thousands of carriers annually and assigned our Preliminary FSRs. More recently we became the ‘go to’ rating agency for InsurTechs. It will require an insurer associated with a company of Alphabet’s substance to intersect and connect healthcare, data science, and technology to move the needle on healthcare cost inflation and predictability in the proper direction. With a strong balance sheet, data-driven yet innovative technology, a sophisticated insurance partner in Swiss Re Corporate Solutions, and a world class ultimate parent, Coefficient Insurance Company is uniquely positioned to bring solutions as well as stop-loss insurance to this marketplace.”

Denny Weinberg, CEO of Coefficient, said about the Demotech rating process, “Coefficient is pleased to have received an A Double Prime rating from Demotech. It was a pleasure to work with Demotech throughout the rating process; they worked extremely efficiently and thoughtfully to understand Coefficient’s business plan, balance sheet and financial forecasts and to provide Coefficient with a rating quickly.”