SEPTEMBER 12, 2013 12:00 AM (EDT)
A.M. Best Withdraws Ratings of Centene Corporation and Its Subsidiaries
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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - SEPTEMBER 12, 2013 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating (FSR) of B++ (Good) and issuer credit ratings (ICR) of bbb of Absolute Total Care, Inc. (Columbia, SC), Buckeye Community Health Plan, Inc. (Columbus, OH), Coordinated Care Corporation (Indianapolis, IN), Managed Health Services Insurance Corporation, Bankers Reserve Life Insurance Company of Wisconsin (both domiciled in Milwaukee, WI), Peach State Health Plan, Inc. (Smyrna, GA), Sunshine State Health Plan, Inc. (Sunrise, FL) and Superior HealthPlan, Inc. (Austin, TX). Additionally, A.M. Best has affirmed the ICR of bb and debt rating of bb on $425 million 5.75% senior unsecured notes, due 2017 of the parent, Centene Corporation (Centene) (Delaware). The outlook for all the above ratings is stable.
A.M. Best also has downgraded the ICR to bbb from bbb+ and affirmed the FSR of B++ (Good) of Centenes subsidiary, Celtic Insurance Company (Celtic) (Chicago, IL). The outlook for the ICR has been revised to stable from negative, while the outlook for the FSR is stable.
Concurrently, A.M. Best has withdrawn the ratings for all Centene entities as the company has requested to no longer participate in A.M. Bests interactive rating process.
The ratings for Centene and its subsidiaries reflect strong revenue growth and improvement in operating earnings. Premium growth has been augmented through Medicaid expansion in several markets over the medium term, and rate increases have added to the favorable trend in net premiums written as well as net gains through six months ended June 30, 2013.
Partially offsetting these favorable rating attributes are Centenes aggregate risk-based capital levels that have declined over the medium term; however, Centene has historically provided capital support to its subsidiaries, when needed. Furthermore, the company primarily is engaged in the Medicaid market, which poses concentration risks and is subject to highly competitive market challenges.
The methodology used in determining these ratings is Bests Credit Rating Methodology, which provides a comprehensive explanation of A.M. Bests rating process and contains the different rating criteria employed in the rating process. Bests Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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