Best’s News & Research Service - January 22, 2016 12:52 PM (EST)
A.M. Best Revises Outlook to Positive for Hawaii Dental Service
Oldwick //BestWire// - A.M. Best has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Hawaii Dental Service (HDS) (Honolulu, HI).
The revised outlook reflects HDS’ strong risk-adjusted capitalization, which has improved over the last five years, and robust earnings trend over the past few years with return on revenue at or above 10%. Furthermore, HDS has a dominant market share with significant membership in all segments of the population. Partially offsetting these positive ratings are the company’s exposure to business concentration risk due to Hawaii’s limited geography and a high concentration of members in a single group. The company is also working to add more diversity to its product designs in order to fill service gaps in the population. Further revenue development is limited to organic population growth and an unemployment rate that is below the national average.
Positive rating actions may occur if the company has profitable membership growth and a continued trend of strong margins. Factors that could adversely affect the rating include a trend of lower operating margins, further allocation to riskier invested assets or the loss of its largest account.
This press release relates to rating(s) 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.
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