AM Best Upgrades Credit Ratings of BCS Financial Group Members
AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to "a" (Excellent) from "a-" (Excellent) for the members of BCS Financial Group (BCS). Concurrently, AM Best has revised the outlooks on the Credit Ratings (ratings) to stable from positive. BCS' members are BCS Insurance Company, 4 Ever Life Insurance Company (both headquartered in Oakbrook Terrace, IL) and 4 Ever Life International Limited (Hamilton, Bermuda).
The ratings reflect BCS' balance sheet strength, which AM Best assesses as strongest, as well as their adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The rating upgrades are attributed to a change in BCS' business profile to neutral from limited, reflecting the organization's distribution arrangement with Blue Cross Blue Shield Plans that drives sales, diversification and competitive advantage. BCS is owned by 35 Blue Cross Blue Shield Plans and the Blue Cross Blue Shield Association, and strategically provides solutions for the emerging needs of its owners and other partners via its product portfolio, distribution capabilities and claim management services. In response to the needs of its owners, BCS has developed several new products, processes and services in recent years, and has entered into a number of new partnerships and strategic investments, as innovation remains at the forefront of its business model. BCS operates in the highly competitive stop loss, group voluntary accident and health, international health, travel and life insurance markets. Although the group lacks a material market share in any specific line of business, gross premium has grown across most lines of business in recent years and is diversified by product and geography. In 2020, several product lines contracted due to the COVID-19 pandemic; owever, the company expects growth to resume as economic activity returns to normal levels. Net premium remains somewhat concentrated in stop loss as this segment composes over two-fifths of net premium.
BCS has maintained the strongest level of risk-adjusted capitalization over the past five years, as measured by Best's Capital Adequacy Ratio (BCAR), which provides a foundation for the organization's growth and business initiatives. The company's investment portfolio is weighted heavily toward investment grade fixed income securities. BCS has managed underwriting risk exposure through elevated use of reinsurance with reliance on high quality counterparties. Operating performance, which is accessed as adequate, has produced stable results generated by positive, albeit fluctuating, underwriting earnings supplemented by steady investment income.
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