The positive outlooks reflect BEST Life becoming a niche player in the dental Patient Protection and Affordable Care Act (ACA) exchange markets that it operates in, continued strong capital growth and an improved near-term earnings trend. BEST Life has increased penetration of dental products in its priority states, especially in the dental ACA marketplace, and has expanded its offerings geographically by entering dental ACA markets in additional states in 2016. The company also has demonstrated a trend of strong capital growth over the past five years largely due to improved operating results and a lack of dividends up-streamed to its parent company,
The Credit Ratings (ratings) reflect BEST Life’s solid risk-adjusted capitalization attributable to recent strong earnings and its shift from a major medical carrier to a primarily dental carrier. Furthermore, the ratings reflect the company’s ability to continue to manage and reduce expenses through the relocation and consolidation of operations.
Offsetting rating factors include very small market share in a competitive dental segment, a lack of diversification in earnings premium and a recent decline in premiums. Additionally, there is a risk of larger carriers previously focused on medical ACA products increasing focus on the dental segment in the markets where BEST Life operates, potentially resulting in pricing pressure and membership losses.
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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