OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” to Regence BlueShield of Idaho, Inc. (Lewiston, ID). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings of Regence BlueShield of Idaho, Inc. reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
Regence Blue Shield of Idaho, Inc. has a high level of risk-adjusted capital, which has shown good growth over the past three years. This favorable trend is based on favorable operating earnings across all lines of business. Invested assets are held mainly in investment-grade, fixed-income securities and cash; however, the company does have a relatively high allocation to equity investments, as compared with its peers, with common stocks representing approximately one-fifth of capital and surplus.
The company has demonstrated a trend of improvement in operating results with increased operating and net income, driven predominantly by margin expansion in all lines of business. There also has been material improvement in the administrative cost ratio over the past three years, based on its administrative service agreement with Cambia Health Solutions, Inc. (Cambia). Premium development has been challenged over the past year with increased enrollment being seen in administrative service only (ASO) accounts with declining individual, and to a lesser degree, commercial group risk business.
Regence BlueShield of Idaho, Inc. has a good market presence, even though its market share in Idaho is not dominant. The company benefits from its Regence BlueShield brand in its primary market, as well as from its affiliation with Cambia through a unified business strategy and shared services, which include expense and liquidity management. ERM is coordinated with Cambia, and the program’s framework is well-developed and comprehensive. There is mature management of risk with appropriate controls and governance in place.
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