AM Best Withdraws Credit Ratings of Vision Service Plan and Its Subsidiaries
- July 09, 2026 03:02 PM (EDT)
//BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of Vision Service Plan (Rancho Cordova, CA) and its subsidiaries, collectively known as VSP Vision. The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best’s interactive rating process. (See below for a detailed listing of the subsidiaries and ratings.)
The ratings reflect VSP Vision’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).
The affirmation of VSP Vision’s ratings reflects continued capital and surplus growth through year-end 2025, and into early 2026. Five-year compounded annual growth rate of capital and surplus remains strong at 16.3% through year-end 2025. In addition, the group has continued to maintain favorable liquidity metrics and cash flows through 2025. Non-insurance entities continued to generate positive cash flow, which builds additional liquidity for VSP insurance entities. The group’s balance sheet strength is further aided by its very strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which has been driven by the continued growth of capital and surplus, as well as supported by consistent operating earnings. However, AM Best expects VSP Vision’s balance sheet metrics to remain pressured in the short term and there has been a high level of volatility in risk-adjusted capital over the last years driven by recent large debt issuance and acquisitions. In addition, the recent transactions have materially increased financial leverage and created a significant amount of goodwill, which places considerable pressure on the balance sheet assessment. Financial leverage was approximately 44% at year-end 2025, compared to 38% the prior year-end, and is expected to increase in 2026, due to a new debt issuance. AM Best expects that the group will deleverage to its targeted financial leverage over the near to medium term. The group’s interest coverage remains good.
VSP Vision has grown net premiums written and reported varying net income annually over the last five years. Overall earnings are expected to remain positive, but will be lower than historical levels.
VSP Vision continues to benefit from its favorable business profile assessment, as the group maintains a leading market share in the vision care benefit marketplace, with a well-established network of providers and strong brand name recognition. The addition of Eyemart Express and Marcolin enhances the organization’s already substantial network of retail vision care locations and improves VSP Vision’s competitive advantage in the integrated vision care space. The group does face competition from a wide variety of companies, including traditional and non-traditional vision service providers and insurance carriers. However, as the vision landscape has evolved, the group has adequately innovated to remain a market leader.
The ratings also reflect VSP Vision’s appropriate ERM assessment. The organization has maintained a developed ERM framework, with clear risk appetite and tolerance levels in place. VSP Vision balances risk and opportunity while ensuring risks are managed within the group's risk tolerance and portfolio risk appetite.
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) have been affirmed with stable outlooks. Concurrently, AM Best has withdrawn these ratings at the company’s request for the following subsidiaries of VSP Vision:
- Eastern Vision Service Plan, Inc.
- VSP Vision Care, Inc.
- Vision Service Plan Insurance Company (OH)
- Vision Service Plan of Illinois, NFP
- Vision Service Plan Insurance Company (MO)
- Vision Service Plan (CA)
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.