OLDWICK, N.J.--(BUSINESS WIRE)--May 8, 2025-- AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a” (Excellent) of Aetna Life Insurance Company (ALIC) (Hartford, CT) and the other members of Aetna Health & Life Group, which are operating entities of Aetna Inc. (Aetna) and wholly owned subsidiaries of CVS Health Corporation (CVS Health) [NYSE: CVS]. (Please see below for a detailed listing of the companies.)

Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Allina Health and Aetna Insurance Company (Allina Health) (St. Louis Park, MN). Allina Health is a joint venture subsidiary with subsidiaries of Aetna.

Lastly, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of CVS Caremark Indemnity Ltd. (CVS Caremark Indemnity) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings of Aetna Health & Life Group reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The rating affirmations for Aetna Health & Life Group reflect the group’s strongest level of risk-adjusted capitalization, as measured by its Best Capital Adequacy Ratio (BCAR), and improved operating performance in first-quarter 2025 and expected for full year 2025. Capital and surplus has grown steadily over the past five years and was aided by capital contributions from its parent company, CVS Health, in 2024. Historically, the group has paid large dividends to its parent while maintaining strong capital growth in most years. Investments are managed centrally, and the risk profile of the group’s investment portfolio has remained relatively consistent over the past few years. The investment portfolio is primarily composed of investment-grade fixed-income securities, as well as cash and cash equivalents.

Additionally, the balance sheet strength is supported by adequate liquidity measures, which are strengthened by the group’s access to the Federal Home Loan Bank of Boston at the lead entity, ALIC. Aetna Health & Life Group continues to have moderate reinsurance leverage; however, its reinsurance arrangements differentiate Aetna from its health insurance peers. In addition to traditional reinsurance with highly rated carriers, Aetna Health & Life Group maintains a quota share reinsurance agreement with Health Re Inc. and subsequent excess of loss protection by Vitality Re entities.

Over the past few years, favorable development in the group’s net premium has been driven by membership growth in the commercial and Medicare Advantage product lines. However, the group expects a decline in Medicare Advantage and individual exchange membership for 2025. Underwriting earnings in 2024 were challenged due to increased utilization, the unfavorable impact of the decline in the group’s Medicare Advantage star ratings for the 2024 payment year, as well as higher acuity in Medicaid. The group’s star ratings improved for 2025, as roughly 90% of members are in a 4+ star Medicare Advantage plan, which combined with pricing actions and other initiatives taken should improve profitability in the line of business during the year. Additionally, investment income has been steady over the past five years and is expected to continue to impact overall earnings positively in 2025 and beyond.

Aetna is one of the nation's leading providers of employee health insurance benefits. Aetna's lines of business are diversified by both product and geography. Furthermore, Aetna maintains a strong market position in the Medicare, Medicaid and commercial markets. The group competes in nearly all U.S. states in both its commercial and government program offerings.

The ratings of Aetna Health & Life Group reflect the negative impact from its ultimate parent, CVS Health, which has elevated financial leverage and goodwill. Unfavorable underwriting performance in 2024 resulted in capital contributions from CVS Health to its insurance subsidiaries, hindering the parent’s plans to de-lever. With earnings expected to improve in 2025, financial leverage should resume a declining trend. Goodwill and intangibles-to-shareholders equity increased over the prior year and exceeded 120% at year-end 2024, as the level of goodwill increased in 2023 driven by the acquisitions of Oak Street Health and Signify Health.

The ratings of Allina Health reflect its balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile, appropriate ERM and the support of the Aetna organization. Allina reported an underwriting loss in 2024 after two straight years of underwriting gains. The underwriting loss was primarily driven by utilization in the Medicare Advantage line. Additionally, earnings are negatively impacted by the amortization of intangible assets, which has resulted in a trend of net losses. In recent years, premium growth has trended favorably in Medicare Advantage products, while commercial premium declined slightly in 2024.

The ratings of CVS Caremark Indemnity reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile, appropriate ERM and the support of its parent. The company's market position is largely driven from its parent, CVS Health, as all the business CVS Caremark Indemnity writes or assumes involves CVS Health affiliated entities. The company has a 15% quota share agreement with SilverScript Insurance Company, a CVS Health affiliate, which comprises most of its premium.

The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed, with stable outlooks for the following members of Aetna Health & Life Group:

• Aetna Life Insurance Company
• Aetna Health and Life Insurance Company
• Aetna Life & Casualty (Bermuda) Ltd.
• Aetna Health Inc. (a Connecticut corporation)
• Aetna Health Inc. (a Florida corporation)
• Aetna Health Inc. (a Georgia corporation)
• Aetna Health Inc. (a Louisiana corporation)
• Aetna Health Inc. (a New Jersey corporation)
• Aetna Health Inc. (a New York corporation)
• Aetna Health Inc. (a Maine Corporation)
• Aetna Health Inc. (a Pennsylvania corporation)
• Aetna Health Inc. (a Texas corporation)
• Aetna Health Insurance Company
• Aetna Health Insurance Company of New York
• Aetna Better Health of Florida, Inc.
• Aetna Health of California Inc.
• Aetna Health of Iowa, Inc.
• Aetna Health of Utah, Inc.
• Aetna Dental of California Inc.
• Aetna Dental Inc. (a New Jersey corporation)
• Aetna Dental Inc. (a Texas corporation)
• American Continental Insurance Company
• Accendo Insurance Company
• Continental Life Insurance Company of Brentwood, Tennessee
• Coventry Health and Life Insurance Company
• Aetna Better Health of Michigan, Inc.
• Aetna Better Health of Missouri, LLC
• Coventry Health Care of Illinois, Inc.
• Coventry Health Care of Kansas, Inc.
• Coventry Health Care of Missouri, Inc.
• Coventry Health Care of Nebraska, Inc.
• Coventry Health Care of Virginia, Inc.
• Coventry Health Care of West Virginia, Inc.
• First Health Life & Health Insurance Company
• SilverScript Insurance Company

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 Performance Assessments, 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. For more information, visit www.ambest.com .

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Jon Housel
Financial Analyst
+1 908 882 1898
jon.housel@ambest.com

Sally Rosen
Senior Director
+1 908 882 2284
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Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
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Al Slavin
Senior Public Relations Specialist
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Source: AM Best