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Ratings agency A.M. Best has removed Cigna Corporation from under review with negative implications and affirmed the financial strength rating (FSR) of A (Excellent) and the long-term issuer credit ratings (long-term ICR) of “a” of the key life/health subsidiaries, health maintenance organizations, New Zealand and European insurance companies.
Concurrently, A.M. Best removed from under review with negative implications and affirmed the long-term ICR of “bbb” and the long- and short-term issue credit ratings (long-term IR; short-term IR) of Cigna. The outlook assigned to these credit ratings is stable.
A.M. Best said the rating actions follow the clarity on the timing of the debt issuance and discussions with the company regarding the Express Scripts transaction.
It highlighted that significant execution risk surrounding the acquisition of Express Scripts is somewhat mitigated by the strong earnings from Cigna’s insurance entities and the sizeable non-regulated earnings from Express Scripts, which can be used to service the debt and de-leverage the organization.
The ratings of Cigna Life Insurance New Zealand, meanwhile, reflect its balance sheet strength, which A.M. Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.
Moreover, the ratings of Cigna New Zealand factor in rating enhancement from the Cigna group. A.M. Best expects the group to provide capital support to the subsidiary in the event that it is unable to maintain appropriate capital adequacy.
