A.M. Best Affirms Ratings of Blue Cross and Blue Shield of South Carolina; Assigns Ratings to InStil Health Insurance Company

Business Editors/Insurance Writers OLDWICK, N.J.--(BUSINESS WIRE)--December 18, 2008--A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of Blue Cross and Blue Shield of South Carolina (BCBS SC) and its wholly-owned subsidiaries, BlueChoice HealthPlan of South Carolina, Inc. (BlueChoice)and Companion Life Insurance Company (Companion Life). A.M. Best also has assigned an FSR of A- (Excellent) and ICR of “a-” to InStil Health Insurance Company (InStil Health). Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and ICRs of “a” of Companion Property & Casualty Group, which consists of Companion Property and Casualty Insurance Company and its wholly owned subsidiaries, Companion Commercial Insurance Company and Companion Specialty Insurance Company (Specialty) (District of Columbia). The outlook for all ratings is stable. All companies are domiciled in Columbia, SC, except where specified. The BCBS SC organization is a market leader in both market share and brand recognition. The organization is built around multiple specialty insurance companies and administrative subsidiaries, while managing the largest provider network in South Carolina. As one its core competencies, the BCBS SC organization has built and manages an exceptionally strong information and technology infrastructure. Broad administrative and service credentials have placed the organization among the nation’s leaders in the distribution of government programs. BCBS SC’s operational footprint is significantly larger than the confines of South Carolina. The organization’s stable operations are evidenced by 20 consecutive years of profitability. Additionally, BlueChoice and Companion Life have strengthened their working relationship with their parent, BCBS SC, after making adjustments to the suite of products offered to members and affiliates. The overall organization has worked to diversify its income stream by balancing fee business versus risk business. InStil Health has generated considerable revenue growth over the past four years, and its trajectory suggests that it will soon become a primary administrator of government programs. Revenue development has reached planned expectations and historical organizational trends. However, earnings are distinctly divergent to BCBS SC and are lagging behind. The company has instituted corrective actions, and planned adjustments in its captive distribution force and administrative expenses should improve future underwriting performance. InStil Health benefits from the explicit capital support of its parent and recently received a capital infusion from BCBS SC. For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.