AM Best Revises Outlooks to Positive for Blue Cross and Blue Shield of Vermont and Its Subsidiary
- July 23, 2026 03:42 PM (EDT)
//BestWire// - AM Best has revised the outlook to positive from stable and affirmed the Financial Strength Rating of C++ (Marginal) and revised the outlook to positive from negative and affirmed the Long-Term Issuer Credit Ratings of “b+” (Marginal) of Blue Cross and Blue Shield of Vermont (BCBSVT) and its subsidiary, The Vermont Health Plan, LLC, collectively known as Blue Cross and Blue Shield of VT Group (BCBSVT Group).
The Credit Ratings (ratings) reflect BCBSVT Group’s balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.
The positive outlook on BCBSVT Group’s ratings reflects the continuing improvement in its operating performance. BCBSVT Group reported underwriting losses in four out of the past five years, driven by higher utilization, as well as medical and pharmacy costs, which have been higher than expected. Since then, the company focused on improving underwriting profitability via rate increases and other initiatives, which resulted in significant improvement in operating performance through year-end 2025, leading to an increase in its capital position. The improvement was supported by more-favorable regulatory rate outcomes, which enhanced pricing adequacy and contributed to the strengthening of the group’s capital position. Positive earnings have been reported through early 2026.
BCBSVT Group’s balance sheet strength had been challenged by declines in the group’s level of capital - absolute and risk-adjusted – each of which had declined over the past few years leading up to 2025. In addition to the earnings accretion, the quality of capital has also improved with full repayment in 2025 of the outstanding surplus notes issued by Blue Cross Blue Shield of Michigan Mutual Insurance Company, an affiliated company. AM Best also notes that although there was a material change in the company’s earnings and capitalization, BCBSVT Group remains under a capital restoration plan by Vermont’s Department of Financial Regulation.
The limited business profile partially reflects the challenging regulatory environment in Vermont, with the Department of Financial Regulation overseeing regulatory capital, while the Vermont Green Mountain Care Board has oversight on rate increases. The differing statutory objectives of the two regulatory authorities have presented challenges historically in obtaining requested rate increases; however, recent regulatory and legislative actions affecting health care cost trends and more-favorable rate outcomes have been more supportive of pricing adequacy. BCBSVT Group maintains a large market share in Vermont, where a large majority of businesses are small in scale, and maintains a large presence in the Affordable Care Act marketplace. However, the group faces limited competition in these markets due to few companies participating.
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 (BCR), Best’s Performance Assessments (PA), Best’s Preliminary Credit Assessments (PCA) 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.