OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Delta Dental Plan of Arkansas (Sherwood, AR). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect Delta Dental Plan of Arkansas’ balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The ratings affirmation reflects Delta Dental Plan of Arkansas’ strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which has strengthened in the past few years driven by earnings and investment income bolstering absolute capital levels, as well as growth in capital & surplus outpacing premium growth. While the company’s investment portfolio has an elevated risk due to a large allocation of equities, this is partially offset by its strongest level of risk-adjusted capitalization. Delta Dental Plan of Arkansas has reported improved earnings for the past several years, a trend that has continued into the first half of 2022.
A partially offsetting factor is the company’s limited business profile. AM Best does note that while Delta Dental Plan of Arkansas operations are limited to dental products in Arkansas, the company maintains a leading market share in the group segment and has diversified its operations into both Medicaid and Medicare Advantage.
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