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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 10, 2002 12:00 AM (EDT)
A.M. Best Co. has raised the financial strength rating to A (Excellent) from A- (Excellent) of Blue Cross and Blue Shield of Mississippi (BCBSMS), a mutual insurance company. The rating outlook is stable.
The rating reflects the company's strong market presence in Mississippi, continued enrollment growth and sound financial condition. Offsetting these strengths are the risks of having a geographic concentration in one state.
BCBSMS is the largest provider of health coverage in Mississippi with a market share of 42% of the state's population and 52% of the insurable population and provides services to over one million residents. By offering a broad spectrum of products, the company has been successful in maintaining its current market share and has had net enrollment gains, despite a limited geographic market. In addition, the individual "Blue Care" product has been quite successful since its introduction in 2000. Non-group health membership has grown by 11% in 2001. This product should enable BCBSMS to continue to increase enrollment and diversify further into the individual health market. A.M. Best believes a lack of significant statewide competitors positions the company well for preserving its market dominance in Mississippi.
BCBSMS has had five years of increasing net income and three years of improving underwriting gains. The company's financial results and enrollment have continued to improve even with the economic downturn that began in 2001. The improvement has been a result of the company's ability to refine benefit offerings, keeping administrative costs low by increasing the electronic submission of claims and greater-on-line access by providers. BCBSMS's capitalization is excellent. The company maintains a strong risk-adjusted capital position due to continued profitability and the lack of any debt within the organization.
While BCBSMS has a sizeable market share in Mississippi, the company is subject to regulatory and geographic concentration risks by having all of its business in one state. Any significant changes to the state of Mississippi's legislative and economic environment could have a financial impact on the company. However, A.M. Best does acknowledge that the company has a stable relationship with the State of Mississippi Department of Insurance.
A.M. Best has also raised the financial strength rating to A (Excellent) from A- (Excellent) of BCBSMS's wholly owned subsidiary, Bluebonnet Life Insurance Company.
A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source.