OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings 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 each of these Credit Ratings (rating) is stable.
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 the largest provider of dental benefits in the nation with coverage extended to approximately 34.3 million people.
The rating affirmations reflect growth trends in premium volume, profitability and risk-adjusted capital levels reported on a consolidated and individual company basis. The organization’s trend of strong operating results was driven by increased membership; disciplined pricing; benefit design; continued efficiencies realized from major system upgrades positively impacting expenses; and favorable dental trends. 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 both insured and self-funded businesses. Furthermore, earnings have been accretive to capital, which has allowed the enterprise to improve its level of risk-adjusted capital.
Partially offsetting these strengths is the competitive environment that the organization operates in, which 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. The medium-size to large group markets continue to experience increased competition. Additionally, the potential for near-term legislative and regulatory activity could significantly change the current individual and government-sponsored lines of business. The Dentegra companies are active participants in numerous state exchanges for small groups and individuals as a stand-alone dental policy or through medical partnerships. In addition, the organization provides dental coverage to Medicaid receipients in a number of states.
A.M. Best deviated from its “Rating Members of Insurance Groups” criteria because full rating enhancement was afforded to DDP and DDNY, despite DDC not having direct ownership of DDP or DDNY. However, DDC, DDP and DDNY share common systems, common management and a common mission. As such, A.M. Best expects that the boards of directors would act to support all entities within the group.
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