Market Overview

A.M. Best Revises Outlooks to Positive for Premera Blue Cross and Its Subsidiaries


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,

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

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
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
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