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FOR IMMEDIATE RELEASE
OLDWICK - DECEMBER 05, 2016 02:44 PM (EST)
A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of USAble Mutual Insurance Company (USAble), and its subsidiary, HMO Partners, Inc. (HMO Partners). The outlook of these Credit Ratings (ratings) is stable. Both companies are domiciled in Little Rock, AR.
The ratings of USAble (d/b/a Arkansas Blue Cross and Blue Shield) reflect its well-diversified portfolio of products, its leading position in the Arkansas marketplace and strong risk-adjusted capital levels. The organization is currently well-positioned to implement its ongoing strategies in support of premium and membership growth, as well as its product expansion initiatives.
Offsetting rating factors include a recent decline in earnings as a result of challenges in the individual exchange marketplace and high utilization rates due to increased incidences of chronic illnesses in Arkansas. Additionally, USAble’s business profile remains concentrated within several national accounts.
The ratings of HMO Partners reflect its good level of risk-adjusted capitalization, as well as its strategic role within the USAble organization. A.M. Best anticipates HMO Partners will maintain its current level of capital over the medium term. Offsetting rating factors include the competitive environment in HMO Partners’ core markets and the potential for margin compression driven by increased utilization trends.
A.M. Best deviated from its “Rating Members of Insurance Groups” criteria report by providing HMO Partners with rating enhancement from USAble. As prescribed by the criteria, to be eligible for rating enhancement, an individual company must operate under common ownership (greater than 50%), with the entity providing lift or maintaining board control together with common management. In this case, HMO Partners is not majority owned by one entity, but rather is equally owned by two entities, USAble and Baptist Medical System HMO, Inc.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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