Press Release - MARCH 09, 2018

A.M. Best Assigns Credit Ratings to Allina Health and Aetna Insurance Company

 Doniella Pliss
Associate Director
+1 908 439 2200, ext. 5104

Sally Rosen
Senior Director
+1 908 439 2200, ext. 5280

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


OLDWICK - MARCH 09, 2018
A.M. Best has assigned a Financial Strength Rating of A (Excellent) and a Long-Term Issuer Credit Rating of “a” to Allina Health and Aetna Insurance Company (Allina Health Aetna) (Minneapolis, MN). The Credit Ratings (ratings) were placed under review with negative implications similar to the ratings of all Aetna Inc.’s (Aetna) subsidiaries and joint ventures rated by A.M. Best due to the pending acquisition of Aetna by CVS Health Corporation.

The ratings reflect Allina Health Aetna’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management. The ratings also include support of the parent organizations, Aetna and Allina Health System (Allina).

Allina Health Aetna is the result of a 50/50 joint venture between Aetna ACO Holdings Inc., an affiliate of Aetna, and Allina, a leading health system in the Minneapolis area. Allina Health Aetna intends to focus on cost-efficient care delivery, customer convenience, and an increased level of collaboration between payer and provider. Allina Health Aetna is expected to build on the strength of Allina’s wide presence of hospitals and physicians in the service area and Aetna’s operational capabilities. Allina Health Aetna is expected to incur operating losses in the near term due to the start-up nature of operations; however the company is expected to exhibit steady profitable growth over the next several years. The level of risk-adjusted capitalization is currently more than sufficient to support the anticipated level of business and investment risks. In addition, Aetna and Allina have ample liquidity and capital resources to support the new entity, if needed.

Offsetting rating factors include the start-up nature of operations and the highly competitive marketplace in the service area. In addition, Aetna currently does not have a presence in the Minneapolis area.

Allina Health Aetna is susceptible to typical, potential operational and business risks of a start-up company. The competitive advantage of Allina Health Aetna is tied to the ability of Aetna and Allina to integrate their resources and build effective operations, with a focus on the customer. Failure to execute may diminish the value proposition and make it difficult to achieve growth goals. The marketplace in the Minneapolis area is becoming even more competitive, following the lift of a long-term ban on for-profit carriers to operate in the state. Such market conditions create the potential for irrational pricing and pressure on carriers.

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

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