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FOR IMMEDIATE RELEASE
OLDWICK - AUGUST 31, 2021 09:10 AM (EDT)
AM Best has placed under review with developing implications the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) of Blue Cross and Blue Shield of Florida, Inc. d.b.a. Florida Blue and its affiliates, Health Options, Inc., Capital Health Plan, Inc. (Tallahassee, FL) and Florida Health Care Plan, Inc. (Holy Hill, FL). AM Best also has placed under review with developing implications the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Florida Combined Life Insurance Company. In addition, AM Best has placed under review with developing implications the Long-Term ICR of “a-” (Excellent) of GuideWell Mutual Holding Corporation (GuideWell). All companies are domiciled in Jacksonville, FL, except where noted.
The under review with developing implications of GuideWell, parent of Florida Blue, reflects the announcement on Aug. 24, 2021, of a definitive agreement for GuideWell to acquire all of the outstanding shares of common stock of Triple-S Management Corporation (Triple-S), the parent of the Puerto Rico Blue plan (including all of its subsidiaries). The transaction equity value is approximately $900 million, which includes the assumption of Triple-S’ debt and pension liability.
Triple-S and its subsidiaries will become subsidiaries of GuideWell and will continue to operate under the Triple-S brand. AM Best believes that while this is as sizeable transaction, with a level of execution risk, GuideWell has the financial wherewithal to support Triple-S. Furthermore, Triple-S should benefit from a financially stronger parent in GuideWell and from increased scale as part of a larger organization. AM Best expects that the risk-adjusted capitalization of the Puerto Rico-regulated entities will be managed at a higher level under GuideWell than it was as a stand-alone under Triple-S. GuideWell is expected to benefit from added scale and accretion to earnings in its core businesses, particularly its Medicare Advantage business, as well as added diversity and expertise in certain areas, such as the addition of Medicaid – which Florida had exited a few years ago. Additionally, Triple-S should, over time, benefit from integration through the use of GuideWell’s non-insurance operations, which include a variety of health care-related entities, which are focused on improving health outcomes and cost of care.
The transaction is subject to - state and federal - regulatory review and approvals, as well as approval by Triple-S shareholders. The Credit Ratings (ratings) will remain under review while AM Best discusses the details of the transaction with company management and until the transaction closes. AM Best expects the transaction to conclude in the first half of 2022.
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 Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.