OLDWICK, N.J.--(BUSINESS WIRE)--Aug 22, 2018--A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” of Premera Blue Cross (Premera) and its subsidiaries, LifeWise Assurance Company and LifeWise Health Plan of Washington (all companies are domiciled in Mountlake Terrace, WA).

The ratings reflect Premera’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The revision of the outlooks to positive is based on Premera’s risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Premera experienced a significant increase to its capital and surplus primarily driven by the elimination of the alternative minimum tax by the Tax Cuts and Jobs Act that was passed in late 2017 and improvement in earnings. Furthermore, Premera’s five-year compound annual growth rate (CAGR) for capital outpaces its CAGR for net written premiums. Premera maintained a solid overall liquidity over the past five years above 200%. Additionally, Premera’s operating earnings despite some volatility improved significantly in 2017, which A.M. Best expects to continue in 2018, driven primarily by a trend of lower utilization.

Offsetting rating factors include Premera’s exposure to risky assets driven by elevated investment to equities and schedule BA assets that are higher when compared with peers. However, A.M. Best notes that Premera’s higher risk investments are somewhat mitigated by the company’s strongest level of risk-adjusted capital.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view .

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Financial Analyst

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Associate Director

doniella.pliss@ambest.com

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Manager, Public Relations

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Jim Peavy, +1-908-439-2200, ext. 5644

Director, Public Relations

james.peavy@ambest.com

KEYWORD: UNITED STATES EUROPE NORTH AMERICA NEW JERSEY WASHINGTON

INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE

SOURCE: A.M. Best

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PUB: 08/22/2018 08:53 AM/DISC: 08/22/2018 08:53 AM

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