OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-“ of Hawaii Dental Service (HDS) (Honolulu, HI). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The rating upgrades reflect HDS’ strong risk-adjusted capitalization, which has continued to improve due to the accumulation of earnings. Furthermore, HDS’ return on revenue has remained at 8% or higher. The company has a dominant market share with membership in all segments of the population. Additionally, HDS has added some revenue and earnings diversity by offering information technology services through its affiliated company, Hawaii Client Services.
Offsetting rating factors include HDS operating predominantly in Hawaii, which creates geographic and regulatory risks. Furthermore, Hawaii’s low unemployment rate and limited population growth is expected to constrain membership development. HDS’ customer base is dominated by a perennial large group customer, the loss of which could negatively impact the company.
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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