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

Key Terms

federal home loan bank financial

A Federal Home Loan Bank is one of a group of regional cooperative banks that provide low-cost loans and short-term cash to local banks and credit unions so those institutions can lend for mortgages, community projects and other housing needs. Think of it as a shared emergency fund and wholesale lender for lenders; its actions affect how easily banks can extend credit, which influences mortgage availability, bank stability and related bond markets that investors watch.

quota share reinsurance agreement financial

A quota share reinsurance agreement is a contract where an insurance company and another insurer (the reinsurer) agree to split a block of policies, sharing premiums and claims at a fixed percentage (for example, 30%/70%). It matters to investors because it directly changes an insurer’s risk exposure, capital needs and earnings volatility—similar to a homeowner sharing part of a mortgage with a co-borrower to lower potential loss but also reduce potential return—so it affects profitability, leverage and solvency metrics.

excess of loss protection financial

Excess of loss protection is an insurance/reinsurance arrangement that pays for claims once losses exceed a predetermined threshold, covering the portion of loss above that retention up to a set limit. For investors, it matters because it limits the size of unexpected or catastrophic losses an insurer or company must absorb, smoothing earnings and protecting capital much like an umbrella that only opens after a water level passes a marked height.

medicare advantage star ratings medical

Medicare Advantage star ratings are a government-issued score (1 to 5 stars) that summarize how well Medicare Advantage health plans perform on measures like quality of care, customer service, and member outcomes. For investors, they matter because higher scores can attract more customers, unlock bonus payments and marketing advantages, and signal lower operational or regulatory risk—think of them as product reviews that drive enrollment and revenue for insurers.

goodwill impairment charge financial

Goodwill impairment charge is an accounting write-down taken when the extra value a company recorded from buying another business — things like reputation, customer relationships or brand name — is later judged to be worth less than originally paid. For investors it matters because the charge reduces reported profits and shareholder equity, often signaling that an acquisition didn’t deliver expected benefits and prompting closer scrutiny of future cash flow and management decisions.

financial strength rating financial

A financial strength rating is an assessment of an organization's overall financial health, indicating how well it can meet its financial commitments. Think of it as a report card that shows whether a company or institution is financially stable and capable of withstanding economic challenges. This rating helps investors gauge the level of risk involved in engaging with or investing in that organization.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

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.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260605635029/en/

Jaime Quito
Financial Analyst
+1 908 882 2460
jaime.quito@ambest.com

Sally Rosen
Senior Director
+1 908 882 2284
sally.rosen@ambest.com

Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com

Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com

Source: A.M. Best Rating Services, Inc.