Aetna's Financial Strength Ratings Affirmed Amidst Strategic Business Changes
AM Best has affirmed its Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Ratings of "a" (Excellent) for Aetna Life Insurance Company and other entities within the Aetna Health & Life Group. As subsidiaries of CVS Health Corporation, these entities maintain a stable outlook on their credit ratings.
The ratings underscore Aetna Health & Life Group's robust financial standing, characterized by a solid operational performance and a favorable business profile. AM Best recognizes the group's strong risk-adjusted capitalization, as illustrated by the Best Capital Adequacy Ratio (BCAR). Historically, they have distributed significant dividends to parent companies while retaining substantial risk-adjusted capitalization. In 2024, CVS Health's capital support mitigated losses, leading to improved capital levels by 2025, although dividend payouts were adjusted accordingly.
The group's investment strategy remains steadfast, with a focus on investment-grade fixed-income securities, despite an increase in Schedule BA assets. Aetna Health & Life Group benefits from adequate liquidity, further supported by access to financing through the Federal Home Loan Bank of Boston. The group's moderate reinsurance leverage is notable, featuring traditional reinsurance with rated carriers and agreements with Health Re, Inc., complemented by Vitality Re's excess of loss protection.
In 2025, net premiums grew primarily through government programs, driven by modifications to Medicare Part D under the Inflation Reduction Act, despite declines in membership from repricing strategies. The group's underwriting and net earnings improved significantly, aided by Medicare Advantage Star Ratings improvements and ongoing profitability enhancement measures. Consistent investment income over the past five years also positively contributed to financial stability.
While exiting the individual ACA market in 2026, Aetna continues as a leading provider of employee health insurance across multiple states and maintains a strong presence in the Medicare, Medicaid, and commercial markets.
The ratings also reflect the influence of CVS Health's financial leverage and goodwill on Aetna Health & Life Group. CVS Health’s capital contributions in response to underwriting challenges in 2024 improved financial leverage in 2025, although the goodwill-to-equity ratio remains high over 130%.
Allina Health, in a joint venture with Aetna, exhibits an adequate balance sheet but faces challenges in operational performance and business profile. Although it reported underwriting losses in recent years, 2025 saw improvements due to reduced Medicare Advantage medical costs. CVS Caremark Indemnity, part of this group, benefits from strong support from CVS Health, with a significant 15% quota share agreement with SilverScript Insurance Company. Comprehensive rating information is available on AM Best's website, indicating their global role in the insurance industry.