AM Best Affirms Credit Ratings of Anthem, Inc. and Its Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” of the core Blue Cross Blue Shield-branded insurance subsidiaries of Anthem, Inc. (Anthem) (Indianapolis, IN) [NYSE:ANTM]. The outlook of these Credit Ratings (ratings) is stable.

Concurrently, AM Best has affirmed the Long-Term ICR of “bbb+”, the Long- and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR) of Anthem and the Long-Term IR on the existing surplus notes of Anthem Insurance Companies, Inc. (Indianapolis, IN). The outlook of these ratings is stable.

Furthermore, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” of the UNICARE Life & Health Group (UNICARE) and AMERIGROUP Health Companies (AMERIGROUP). The outlook of these ratings is stable. (See link below for a detailed listing of the companies and ratings). Lastly, AM Best has made the decision to withdraw the FSR of A- (Excellent) and Long-Term ICR of “a-” of the members of the CareMore Health Plan Group (CareMore). (See below for additional details).

The Blue Cross Blue Shield-branded entities, also referred to as Anthem Health Group (Anthem Health), are part of the core subsidiaries of Anthem. The ratings of Anthem Health reflect the balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

Anthem Health’s risk-adjusted capitalization is viewed as strongest, as measured by Best’s Capital Adequacy Ratio (BCAR). The Anthem Health entities comprise the main source of earnings for the parent organization, Anthem, with dividends in the $2 billion range in each of the past several years, and projected to grow in 2019. Anthem Health has been able to grow capital organically, even after dividend payments driven by retained earnings. Anthem Health has reported consistent underwriting and net income in aggregate despite some fluctuations at the product/entity level, and produced very favorable results across its diverse set of business lines and in its various core markets. The group has good geographic diversity, as Anthem operates Blue Cross Blue Shield plans in 14 states with very good brand name recognition and leading market share in the majority of these states. Additionally, the Anthem companies have a solid presence in the national account and BlueCard market segment. Nevertheless, there is geographic limitation to its business based on the Blue Cross/Blue Shield licenses.