Press Release - JULY 10, 2019

AM Best Places Credit Ratings of Vision Service Plan and Its Subsidiaries Under Review With Negative Implications


CONTACTS:
 Jennifer Asamoah
Senior Financial Analyst
+1 908 439 2200, ext. 5203
jennifer.asamoah@ambest.com

Bridget Maehr
Associate Director
+1 908 439 2200, ext. 5321
bridget.maehr@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - JULY 10, 2019
AM Best has placed under review with negative implications the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a” of Vision Service Plan (VSP) (Rancho Cordova, CA) and its insurance subsidiaries.

The Credit Ratings (ratings) of VSP and its subsidiaries, which were last updated in April 2019, were placed under review with negative implications following the announcement that VSP has entered into a definitive agreement to acquire Visionworks. Visionworks and its subsidiaries comprise the sixth-largest specialty retail optical chain in the United States, with over 700 retail locations across 40 states. The acquisition will materially increase the size and geographic reach of VSP’s retail network. Visionworks will provide an additional source of unregulated revenue and earnings. However, the transaction is expected to materially increase financial leverage and create a significant amount of goodwill, which places considerable pressure on the balance sheet assessment. The transaction is subject to regulatory approval. The ratings will remain under review pending further discussions with the management of VSP regarding the financial and operational implications of the transaction and regulatory approval.

The FSR of A (Excellent) and the Long-Term ICRs of “a” have been placed under review with negative implications for Vision Service Plan and its following subsidiaries:


  • Eastern Vision Service Plan, Inc.

  • VSP Vision Care, Inc.

  • Vision Service Plan Insurance Company (OH)

  • Vision Service Plan (OH)

  • Vision Service Plan of Illinois, NFP

  • Vision Service Plan Insurance Company (MO)

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 Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.


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