AM Best Affirms Credit Ratings of Most of CVS Health Corporation’s Aetna Inc. Subsidiaries; Withdraws Credit Ratings of Members of Texas Health Aetna

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a” (Excellent) of Aetna Life Insurance Company (ALIC) (Hartford, CT) and the other members of Aetna Health & Life Group, which are operating entities of Aetna Inc. (Aetna) and wholly owned subsidiaries of CVS Health Corporation (CVS Health) [NYSE: CVS]. The outlook of the FSR is stable, while the outlook of the Long-Term ICR is positive. (Please see below for a detailed listing of the companies.)

Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Allina Health and Aetna Insurance Company (Allina Health) (St. Louis Park, MN). Allina Health is a joint venture with subsidiaries of Aetna Inc. The outlook of these Credit Ratings (ratings) is stable.

In addition, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) of Texas Health + Aetna Health Insurance Company, as well as Texas Health + Aetna Health Plan Inc. Both companies are domiciled in Arlington, TX, and collectively are referred to as Texas Health Aetna. The outlook of these ratings is stable. At the same time, AM Best has withdrawn the ratings of Texas Health Aetna as the companies have requested to no longer participate in AM Best’s interactive rating process.

The ratings of Aetna Health & Life Group reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The positive outlook on the Long-Term ICR for Aetna Health & Life Group reflects the group’s risk-adjusted capitalization, which remains at the strongest level, as measured by its Best Capital Adequacy Ratio (BCAR). Capital and surplus has grown steadily despite large annual dividend payments in each of the past five years. The growth in absolute capital is reflected in the group's five-year compound annual growth rate of 7.6%. The risk profile of the investment portfolio has improved over time, as there has been a reduction in the holdings in several asset classes over the past few years, including commercial mortgages and equities, as well as the allocation to Class 2 and below investment grade bonds.