OLDWICK, N.J.–(BUSINESS WIRE)–#insurance—AM Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” (Excellent) from “a-” (Excellent) of Regence BlueShield of Idaho, Inc. (Lewiston, ID). In addition, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) of Regence BlueShield (Renton, WA), Regence BlueCross BlueShield of Oregon (Regence BCBSO) (Portland, OR), Regence BlueCross BlueShield of Utah (Salt Lake City, UT), Asuris Northwest Health and Commencement Bay Risk Management Insurance Company (both domiciled in Renton, WA). These companies are referred to as Regence Insurance Companies (Regence). The outlook of these Credit Ratings (ratings) is stable.
The ratings of Regence reflect the group’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The rating upgrades of Regence BlueShield of Idaho, Inc. are based on the strategic importance of this entity as a Regence Blue-branded writer in Idaho offering a diversified portfolio of health insurance products with a demonstrated track record of supporting the group’s overall business strategy.
Regence’s balance sheet strength assessment is driven by the group’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is assessed as strongest at year-end 2024. Steady growth in capital and surplus over the past five years has been driven by continued operating gains. Additionally, the group has reported favorable liquidity metrics consistently and is enhanced by access to a line of credit with ultimate parent, Cambia Health Solutions, Inc. (Cambia). Dividends have been paid annually to Cambia over the past five years. Dividends were approximately 26% of the group’s net income during that period, which has had minimal impact on capital.
Operating and net earnings have remained favorable over the past five years driven by net investment income; however, underwriting losses have been reported the past two years, which has limited net income. The 2024 underwriting loss was driven by unfavorable trends within the Medicare Advantage and comprehensive individual segments. It is important to note that Regence targets low margins given its non-profit nature.
The ratings also reflect significant market share in Washington, Oregon, Utah and Idaho. The companies have significant brand strength as Blue-branded plans, as well as under the Regence name. Regence is diversified by geography (as it covers four states) and by product as the group offers a suite of products that include commercial, government and administrative services only products.
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.
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