June 5, 2026 Reinsurance

AM Best Affirms Credit Ratings of CVS Health Corporation’s Aetna Inc. Subsidiaries

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) of Aetna Life Insurance Company (ALIC) (Hartford, CT) and the other members of Aetna Health & Life Group, which are operating entities of Aetna Inc. (Aetna) and wholly owned subsidiaries of its ultimate parent, CVS Health Corporation (CVS Health) (NYSE: CVS). (Please see below for a detailed listing of the companies.)

Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Allina Health and Aetna Insurance Company (Allina Health) (St. Louis Park, MN). Allina Health is a joint venture subsidiary of Aetna.

AM Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of CVS Caremark Indemnity Ltd. (CVS Caremark Indemnity) (Bermuda). The outlook of all these Credit Ratings (ratings) is stable.

The ratings of Aetna Health & Life Group reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

Aetna Health & Life Group’s rating affirmations also reflects its strongest level of risk-adjusted capitalization, as measured by Best Capital Adequacy Ratio (BCAR). While historically the group has paid large dividends to its parents while maintaining the strongest levels of risk-adjusted capitalization, this trend reversed in 2024 when CVS Health contributed capital to support losses and growth in the business. Capital improved in 2025, driven by earnings; however, AM Best notes that dividends paid to the parent were lower than normal and are expected to return to historical levels in the near term. Investments remain managed centrally at the enterprise level, and the risk profile of the group’s investment portfolio has remained consistent over the last few years, although there has been steady increases in schedule BA assets. Aetna Health & Life Group’s investment portfolio primarily holds investment-grade fixed-income securities, schedule BA assets, as well as cash and cash equivalents.

Aetna Health & Life Group’s balance sheet strength is also supported by adequate liquidity measures, which are further supported by access to the Federal Home Loan Bank of Boston at the lead entity, Aetna Life Insurance Company. Aetna Health & Life Group continues to have moderate reinsurance leverage; although, its reinsurance arrangements differentiate Aetna from its health insurance peers. In addition to traditional reinsurance with highly rated carriers, Aetna Health & Life Group maintains a quota share reinsurance agreement with Health Re, Inc. and subsequent excess of loss protection by Vitality Re entities, which had another issuance in 2026, expiring in 2030.

In 2025, net premium written growth was driven by a strong increase in government programs mainly driven by changes to Medicare Part D from the Inflation Reduction Act, rating actions, partially offset by declining memberships driven primarily by the group's repricing strategy.

Underwriting and net earnings improved in 2025, driven by an improvement in Medicare Advantage Star Ratings for its Medicare Advantage plans, with 88% of members in a four + star rated plan, along with initiatives taken to improve profitability. This follows a challenging year in 2024, when underwriting losses were driven by several factors including: increased utilization, the unfavorable impact of the decline in the group’s Medicare Advantage Star Ratings for the 2024 payment year, as well as higher acuity in Medicaid. Additionally, investment income has been steady over the last five years and is expected to continue to be accretive to earnings.

Aetna is one of the nation's leading providers of employee health insurance benefits. Aetna's lines of business are diversified by both product and geography. Furthermore, Aetna maintains a strong market position in the Medicare, Medicaid and commercial market and competes in all U.S. states. AM Best notes that Aetna exited the individual ACA market effective January 1, 2026.

The ratings of Aetna Health & Life Group reflect the negative impact from CVS Health, which has elevated financial leverage and goodwill. Unfavorable underwriting performance in 2024 resulted in capital contributions from CVS Health to its insurance subsidiaries, contributing to elevated leverage at the parent. Financial leverage declined slightly in 2025, due to slightly lower debt outstanding and improved earnings. Goodwill and intangibles-to-shareholders equity improved in 2025, driven by lower goodwill due to the goodwill impairment charge related to CVS Health’s Health Care Delivery reporting unit that occurred in third-quarter 2025 for Oak Street Health. However, the goodwill and intangibles to equity still exceeded 130% at year-end 2025.

The ratings reflect Allina Health’s balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and appropriate ERM and the support of the Aetna organization. Allina Health has reported net and underwriting losses for the last two years. While Allina Health reported an underwriting loss in 2025, it marked an improvement compared to the prior year. The improvement was mainly driven by lower-than expected medical costs in the Medicare Advantage. Over the last few years, the company has reported net losses due to the amortization of intangible assets, which is expected to end in 2026. After this, net income is expected to improve in future years.

The ratings reflect CVS Caremark Indemnity’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM and the support of its parent. The company’s market position is largely dependent on CVS Health, as all of the business CVS Caremark Indemnity writes or assumes involves CVS Health affiliated entities. Most importantly, the company has a 15% quota share agreement with SilverScript Insurance Company, a CVS Health affiliate, which comprises most of its premiums.

The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed, with stable outlooks for the following members of Aetna Health & Life Group:

Aetna Life Insurance Company
Aetna Health and Life Insurance Company
Aetna Life & Casualty (Bermuda) Ltd.
Aetna Health Inc. (a Connecticut corporation)
Aetna Health Inc. (a Florida corporation)
Aetna Health Inc. (a Georgia corporation)
Aetna Health Inc. (a Louisiana corporation)
Aetna Health Inc. (a New Jersey corporation)
Aetna Health Inc. (a New York corporation)
Aetna Health Inc. (a Maine Corporation)
Aetna Health Inc. (a Pennsylvania corporation)
Aetna Health Inc. (a Texas corporation)
Aetna Health Insurance Company
Aetna Health Insurance Company of New York
Aetna Better Health of Florida, Inc.
Aetna Health of California Inc.
Aetna Health of Iowa, Inc.
Aetna Health of Utah, Inc.
Aetna Dental of California Inc.
Aetna Dental Inc. (a New Jersey corporation)
Aetna Dental Inc. (a Texas corporation)
American Continental Insurance Company
Accendo Insurance Company
Continental Life Insurance Company of Brentwood, Tennessee
Coventry Health and Life Insurance Company
Aetna Better Health of Michigan, Inc.
Aetna Better Health of Missouri, LLC
Coventry Health Care of Illinois, Inc.
Coventry Health Care of Kansas, Inc.
Coventry Health Care of Missouri, Inc.
Coventry Health Care of Nebraska, Inc.
Coventry Health Care of Virginia, Inc.
Coventry Health Care of West Virginia, Inc.
First Health Life & Health Insurance Company
SilverScript Insurance Company

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.