OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has upgraded the financial strength rating (FSR) to B (Fair) from B- (Fair) and issuer credit rating (ICR) to “bb” from “bb-” of Dental Care Plus, Inc (DCP) (Cincinnati, OH). The outlook for both ratings has been revised to positive from stable.

The rating upgrades reflect DCP’s positive operating performance and improved capitalization. DCP reported favorable underwriting net income in 2011 after two years of losses. The company’s level of risk-adjusted capital improved in 2011 as a result of favorable earnings and flat premiums year over year. Furthermore, DCP’s capitalization also improved in the first quarter of 2012, due to a capital contribution of $300,000.

Offsetting these positive rating factors is the highly competitive business environment in which DCP operates, where both local and national multiline insurers vie for the profitable dental business. As a dental insurance carrier and vision service provider, DCP’s business is written in two states with a concentration of six to one in Ohio and Kentucky, posing a geographic concentration risk.

Key rating drivers that could lead to positive rating actions for DCP include sustained positive earnings and capital growth, which can be developed organically or through capital contributions.

Key rating drivers that could lead to negative rating actions include operating losses, a decline in risk-adjusted capital or higher premium leverage.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Understanding BCAR for Life/Health Insurers” and “Risk Management and the Rating Process for Insurance Companies.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
David Mitchell, 908-439-2200, ext. 5556
Senior Financial Analyst
david.mitchell@ambest.com
or
Sally Rosen, 908-439-2200, ext. 5280
Managing Senior Financial Analyst
sally.rosen@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Source: A.M. Best Co.