AM Best Affirms Ratings for Aetna Health & Life Group and Affiliates
AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "a" (Excellent) for Aetna Life Insurance Company and other entities under Aetna Health & Life Group, subsidiaries of CVS Health Corporation. This evaluation extends to Allina Health and Aetna Insurance Company and CVS Caremark Indemnity Ltd., with a stable outlook for all.
Aetna Health & Life Group's ratings consider its robust balance sheet, strong operational performance, favorable business profile, and effective enterprise risk management (ERM). The group maintains a strong risk-adjusted capital position, bolstered by CVS Health's capital contributions in 2024 to offset losses and support growth. Their investment strategy includes centrally managed investment-grade fixed-income securities and an increasing presence in schedule BA assets.
In terms of liquidity, Aetna Health & Life Group benefits from access to the Federal Home Loan Bank of Boston, supporting its financial operations. The group employs strategic reinsurance arrangements, incorporating traditional carriers and a quota share reinsurance agreement with Health Re, Inc., complemented by Vitality Re entities' loss protection.
The group's net premium growth in 2025 was driven by government programs and Medicare Part D changes under the Inflation Reduction Act, even as membership levels declined due to repricing strategies. Improvements in Medicare Advantage Star Ratings and profitability initiatives led to enhanced underwriting and net earnings in 2025, following a challenging 2024 marked by increased utilization and underperformance in Medicare Advantage ratings.
Aetna's strong market presence spans Medicare, Medicaid, and commercial sectors across all U.S. states, although it exited the individual ACA market as of January 2026. Ratings reflect challenges posed by CVS Health's financial leverage and goodwill impacts, though financial leverage slightly improved in 2025 due to reduced debt and enhanced earnings.
For Allina Health, the ratings reflect assessments of adequate balance sheet strength, marginal operational performance, and ERM appropriateness. Despite recent net and underwriting losses, improvements in 2025, particularly due to lower medical costs in Medicare Advantage, indicate potential for future financial recovery as intangible asset amortization concludes in 2026.
CVS Caremark Indemnity's ratings consider its solid balance sheet, adequate operating performance, and reliance on CVS Health, with the majority of its premiums linked to a 15% quota share agreement with SilverScript Insurance Company, an affiliate of CVS Health.
Overall, the affirmed ratings reflect the financial and operational stability across Aetna Health & Life Group's entities and their strategic affiliations with CVS Health, highlighting their comprehensive presence and competitiveness in the insurance market.