Press Release - MAY 23, 2018

A.M. Best Affirms Credit Ratings of Delta Dental of California and Its Affiliates


CONTACTS:
 Jeffrey Lane
Senior Financial Analyst
+1 908 439 2200, ext. 5567
jeffrey.lane@ambest.com

Joseph Zazzera, MBA
Director
+1 908 439 2200, ext. 5797
joseph.zazzera@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - MAY 23, 2018
A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of Delta Dental of California (DDC) (San Francisco, CA) and its affiliates, Delta Dental Insurance Company (DDIC) (Wilmington, DE), Delta Dental of Pennsylvania (DDP) (Mechanicsburg, PA) and Delta Dental of New York (DDNY) (New York, NY). The outlook for these Credit Ratings (rating) is stable.

The ratings reflect Delta Dental of California Group’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The Dentegra Group, Inc. (Dentegra) is a non-profit Delaware holding company formed by DDC and DDP to oversee and coordinate the strategic activities of both entities and their affiliates. DDC is the largest member company of the Delta Dental Plans Association, a trade organization for Delta Dental member companies operating in all 50 states, the District of Columbia, U.S. Virgin Islands and Puerto Rico. DDC, DDP, DDIC and DDNY together with their affiliate companies is one of the largest providers of dental benefits in the nation with coverage extended to more than 35 million people.

The rating affirmations reflect the organization’s strongest level of risk-adjusted capital on a consolidated basis. Capital growth has been driven primarily by strong net income, and premium, which generated its highest level of earnings in 2017, has consistently grown with increased enrollment. The operating performance assessment of strong was driven by continued efficiencies realized from major system upgrades that reduced expenses; favorable dental trends; disciplined pricing; and benefit design. The organization continues to focus on streamlining operations and investing to modernize its information and technology infrastructure, which has resulted in improved efficiency, cost savings and increased market penetration in insured and self-funded businesses.

Offsetting these strengths is the very competitive environment within the dental market segment. The organization faces competition from strong participants ranging from the largest carriers offering national, full-line commercial insurance to the small local, single office, third-party administrators providing claims payment services. Additionally, there is increased competition in the small-to-medium size, and large group markets. Furthermore, potential legislative and regulatory activity could have an impact on the current individual and government-sponsored lines of business. A.M. Best notes that the Dentegra companies are active participants in numerous state exchanges for small groups and individuals, as stand-alone dental policies or through medical partnerships. In addition, the organization provides dental coverage to Medicaid recipients in a number of states.

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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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