Best’s News & Research Service - March 11, 2022 04:45 PM (EST)
AM Best Takes Various Credit Rating Actions on GuideWell Mutual Holding Corporation and Certain Triple-S Management Corp. Subs.
- March 11, 2022 04:45 PM (EST)
Oldwick //BestWire// - AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) of Blue Cross and Blue Shield of Florida, Inc. d/b/a Florida Blue, and its affiliates, Health Options, Inc., Capital Health Plan, Inc. (Tallahassee, FL) and Florida Health Care Plan, Inc. (Holly Hill, FL). The companies collectively are referred to as Blue Cross and Blue Shield of Florida Group. AM Best also has removed from under review with developing implications and affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Florida Combined Life Insurance Company, Inc. In addition, AM Best has removed from under review with developing implications and affirmed the Long-Term ICR of “a-” (Excellent) of GuideWell Mutual Holding Corporation (GuideWell). All of the aforementioned companies are domiciled in Jacksonville, FL, unless otherwise specified. The outlook assigned to these Credit Ratings (ratings) is stable.
Concurrently, AM Best has removed from under review with positive implications and upgraded the FSR to A- (Excellent) from B++ (Good) and the Long-Term ICRs to “a-” (Excellent) from “bbb+” (Good) of Triple-S Salud, Inc. (TSS), Triple-S Vida, Inc. (TSV) and Triple-S Advantage, Inc. (TSA). TSS and TSV together are referred to as Triple-S Management Group. The outlook assigned to these ratings is stable. At the same time, AM Best has revised the implications of the under review status to developing from positive for the FSR of B+ (Good) and the Long-Term ICR of “bbb-” (Good) of Triple-S Blue, Inc., I.I. (TSB).
Furthermore, AM Best has removed from under review with positive implications and affirmed the FSR of B+ (Good) and the Long-Term ICR of “bbb-” (Good) of Triple-S Propiedad, Inc. (TSP) (Guaynabo, PR). The outlook assigned to this rating is positive. All of the Triple-S companies are domiciled in San Juan, PR, unless otherwise specified.
Lastly, AM Best has withdrawn the Long-Term ICR of “bb+” (Fair) of Triple-S Management Corporation (TSM), as this entity is now an intermediate holding company under GuideWell Mutual Holding Corporation. At the time of the withdrawal, the rating was under review with positive implications.
These rating actions follow the completion of the acquisition of Triple-S Management Corporation and its subsidiaries by GuideWell Mutual Holding Corporation.
The ratings of Blue Cross and Blue Shield of Florida Group’s reflect its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The affirmation of Blue Cross and Blue Shield of Florida Group’s ratings reflects its good brand image and strong operating performance, as well as the organization’s business diversification strategy and strong overall liquidity measures. Blue Cross and Blue Shield of Florida Group also has low financial leverage within the overall organizations. Furthermore, Blue Cross and Blue Shield of Florida Group continues to maintain a dominant market position in Florida with strong brand recognition, strategic relationships with a diverse group of provider networks and a balanced product portfolio. Blue Cross and Blue Shield of Florida Group’s operating performance had achieved record levels in recent years; however, underwriting profitability moderated in 2021 as utilization trends began to normalize, less COVID-related deferrals of care and increased COVID-related costs and treatments.
The ratings of Florida Combined Life Insurance Company, Inc. reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate ERM.
The ratings of Triple-S Management Group reflect its balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. In addition, Triple-S Management Group benefits from its strategic importance to the parent, GuideWell.
The ratings of TSA reflect its balance sheet strength, which AM Best assesses as weak, as well as its strong operating performance, limited business profile and appropriate ERM. In addition, TSA benefits from its strategic importance to GuideWell.
The rating upgrades of Triple-S Management Group and TSA reflect being a part of GuideWell, a financially stronger organization that has the financial wherewithal to provide support if necessary.
The ratings of TSB reflect its balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and appropriate ERM.
The under review with developing implications status for TSB reflects AM Best’s need for additional discussions with management about the strategic position of this entity within the new broader organization, which is still being determined. The ratings for TSB will remain under review while AM Best conducts discussions with management on the strategic importance and future plans of TSB with the GuideWell organization.
The ratings of TSP reflect its balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and marginal ERM.
TSP’s balance sheet strength is underpinned by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects the company to sustain balance sheet strength stability, supported by organic capital generation from profitable operating results. The positive outlooks reflect these favorable trends.
TSP’s operating performance assessment of adequate is due to its improved underwriting and operating performance, largely driven by management initiatives that include revising underwriting guidelines, culling unprofitable books of business and significant rate increases. AM Best views the company’s business profile as limited due to its geographic concentration in Puerto Rico, which exposes its results to weather-related events and regulatory challenges. TSP’s ERM program is assessed as marginal, as risk management capabilities do not align fully with its risk profile. TSP demonstrated weakness in the company’s reinsurance purchasing decision for the enterprise, as the company significantly exceeded the catastrophe reinsurance program with losses from Hurricane Maria. While management has refined and enhanced the overall ERM framework and capabilities, more time is needed to determine the ultimate effectiveness of these changes.
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, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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