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AM Best Affirms Credit Ratings of BCBSM, Inc. and HMO Minnesota; Withdraws Ratings of MII Life Insurance Incorporated

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 BCBSM, Inc., d/b/a Blue Cross Blue Shield of Minnesota (BCBSMN), and its subsidiary, HMO Minnesota, d/b/a Blue Plus. In addition, AM Best has affirmed the Long-Term Issue Credit Rating of “bbb+” (Good) of the $250 million 3.79% senior unsecured notes due 2025 issued by BCBSMN. Concurrently, AM Best has affirmed the FSR of B++ (Good) and the Long-Term ICR of “bbb+” (Good) of MII Life Insurance, Incorporated (MII Life). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn the ratings of MII Life at it has requested to no longer participate in AM Best’s interactive rating process. All companies are domiciled in Eagan, MN.

The ratings of BCBSMN reflect its balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The rating affirmations of BCBSMN are driven by its strong balance sheet strength. The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), has been pressured from decreased capital and surplus for 2022 due to annual dividend payments to the parent company combined, unrealized capital losses and strong top line growth. AM Best anticipates the company’s BCAR assessment to strengthen over the near term through retained operating earnings. The organization benefits from favorable financial flexibility through access to Federal Home Loan Bank borrowing, funding facilities and cash available at the parent company.

BCBSMN’s premium revenue has shown a good growth trend over the past few years and into 2023. This development is attributed to membership growth and appropriate rate actions. The company’s profitability over the past year was driven largely by the Medicaid lines of business. Resumption of Medicaid redeterminations in 2023 will likely have a negative impact on enrollment and underwriting income for this segment through 2024. Overall earnings are expected to moderate and become more evenly distributed by business segment.

BCBSMN maintains a strong market position in Minnesota, which it has maintained through brand recognition, strategic relationships with providers and a diversified product portfolio. However, the company operates in a very competitive market and has some geographic limitations to its business as a licensee of the Blue Cross Blue Shield Association. The company benefits from a well-developed and formal ERM program, which is managed at the organization's parent level.

The ratings of MII Life reflect its balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate ERM, as well as implicit support of its parent organization. MII Life previously held the organizations’ health savings account (HSA) and Medicare Part D business. In 2021, the HSA business was sold and MII Life stopped writing Medicare Part D business. A small amount of stop loss business remains and is reinsured to BCBSMN.

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

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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