(The following statement was released by the rating agency)
CHICAGO, March 14 (Fitch) Fitch Ratings has published a special
a credit overview of Blue Cross and Blue Shield (BCBS) licensed
and managed care companies.
This report, which is updated and published annually by Fitch,
BCBS companies' common credit strengths and weaknesses, key
and formation and growth. The report also includes a comparison
company-specific size/scale characteristics and quantitative
credit factors as
they relate to Fitch's median sector credit factor (SCF) rating
BCBS companies' common credit strengths cited in the report
provider networks that contribute to large market shares in
robust capitalization metrics, modest liquidity needs, and
reserves as measured by development of the number of days in
Common credit weaknesses include enrollment concentrations in a
limited number of states resulting in heightened exposure to
economic, and political conditions. Additionally, rates of
return on revenue
and on capital are often lower and capital exposure to equity
volatility is often comparatively high.
In 2014 Fitch expects the government-sponsored health insurance
have a larger impact on the BCBS companies than on
publicly-owned peer health
insurers. The agency believes that adapting to the
environment and the exchanges' uncertain profitability are key
faced by the BCBS companies.
Other on-going credit challenges include funding pension plan
reducing concentration risks and adding scale, and balancing
emanating from their nonprofit focus, with the need to generate
the earnings and
capital required to make adequate and efficient investments in
Fitch's special report, 'Blue Cross/Blue Shield Credit Overview'
is available at
www.fitchratings.com' or by clicking on the link.
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60603
Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549,
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Insurance Rating Methodology' (Nov. 13, 2013)
--Health Insurance and Managed Care (U.S.) Sector Credit Factors
(Dec. 18, 2013).
Applicable Criteria and Related Research: Blue Cross/Blue Shield
Insurance Rating Methodology
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