AM Best Takes Various Credit Rating Actions on Elevance Health, Inc. and Most of Its Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of "a+" (Excellent) of the core Blue Cross Blue Shield (BCBS)-branded insurance subsidiaries of Elevance Health, Inc. (Elevance) (Indianapolis, IN) (NYSE:ELV), as well as most of its non-Blue-branded subsidiaries. In addition, AM Best has upgraded the FSR to A (Excellent) from A- (Excellent) and the Long-Term ICR to "a+" (Excellent) from "a-" (Excellent) of Wellpoint Life and Health Insurance Company and Wellpoint West Virginia, Inc. These companies collectively are referred to as Anthem Health. At the same time, AM Best has affirmed the Long-Term ICR of "bbb+" (Good), the Long- and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR) of Elevance and the Long-Term IR on the existing surplus notes of Anthem Insurance Companies, Inc. (Indianapolis, IN).

Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of "a-" (Excellent) of WellPoint Insurance Services, Inc. (WISI) (Honolulu, HI). The outlook of these Credit Ratings (ratings) is stable.

Lastly, AM Best has removed from under review with positive implications and upgraded the FSR to A (Excellent) from A- (Excellent) and the Long-Term ICR to "a" (Excellent) from "a-" (Excellent) of Granular Insurance Company (Granular) (Charleston, SC). The outlook assigned to these ratings is stable.

The ratings of Anthem Health reflect the group's balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM). In addition, the ratings of Wellpoint Life and Health Insurance Company and Wellpoint West Virginia, Inc. were upgraded due to its strategic importance as medical and stop-loss entities in the organization.

Anthem Health's rating affirmations reflect its very strong balance sheet strength assessment, which has been driven by the group's favorable operating performance and strong cash flow trends. The group's risk-adjusted capitalization is considered very strong, as measured by Best's Capital Adequacy Ratio (BCAR). Furthermore, Anthem Health has continued to report consistent capital and surplus growth, driven by favorable net earnings, which has outpaced premium growth consistently and led to increased absolute and risk-adjusted capitalization. Anthem Health's invested asset portfolio has been relatively conservative and mainly composed of investment grade fixed income securities, cash and short-term investments, as well as minor allocations to alternative invested assets.

AM Best recognizes that Anthem Health's current level of liquidity was sound through 2025. The group has access through its holding company to a $5 billion revolving credit facility and a $5 billion commercial paper program (with a combined maximum of $5 billion capacity to borrow between the two programs). Anthem Health also has access to Federal Home Loan Bank (FHLB) program borrowings through its insurance subsidiaries and had approximately $180 million in outstanding FHLB loans as of September 2025.

Anthem Health's financial leverage at Elevance increased to approximately 42% and AM Best expects financial leverage to decline slightly and return to Elevance's targeted 40% level by year-end 2025. Moreover, Elevance has been active in small and mid-sized acquisitions over the past years, expanding its presence in various insurance markets and building stronger nonregulated and vertical integration capabilities. However, while financial leverage remains within an acceptable range, AM Best considers Elevance's goodwill and intangibles to equity as high, at over 90% through September 2025. AM Best acknowledges that a portion of the intangibles is the BCBS trademarks, which are required to operate as a BCBS-branded entity. Furthermore, Elevance has demonstrated strong interest coverage through 2025. Cash flows from its regulated and nonregulated operations also have been very good and generally increased over the past five years.

Moreover, Anthem Health's operating performance is considered strong, with the company reporting consistent premium growth and solid earnings, although some lines of business will remain challenged for the remainder of 2025 and throughout 2026. In addition, profitability ratios remain strong, as measured by its return-on-revenue and return-on-equity metrics through 2025. Premium growth has been driven by enrollment gains in most of its lines of business. The company's operating earnings benefit from its sizeable overall membership and the related economies of scale, which benefits its medical expenditures and administrative expenses metrics. However, the company's Medicaid membership has declined with the advent of state re-determinations of eligibility, which continued in 2025.

Anthem Health's vast and diversified product offerings remain the basis for its favorable business profile. The group has good geographic diversity, as Elevance operates BCBS plans in 14 states, as well as its non-Blue branded with the WellPoint entities. Anthem Group continues to benefit from strong brand name recognition and a leading market share in the majority of these BCBS states. Additionally, the Elevance companies have a strong presence in the national account/BlueCard market segment and there has been a significant expansion of individual exchange product offerings over the past few years. Wellpoint entities operate in an additional 12 states in the Managed Care Medicaid segment, further expanding Anthem Health's footprint. In addition, various nonregulated business in the Anthem organization, including pharmacy benefit management, complex and home care management and behavioral health administration, add a competitive advantage in all lines of business and allow for cost efficiencies. Over the years, WellPoint entities have been assuming a large volume of Medicaid premium from various Elevance affiliates. Most recently, WellPoint terminated a few contacts, which is expected to have some near-term impact on its overall operations.

Moreover, Anthem Health's ERM is managed at the ultimate parent level, but it has local functionality as well. The ERM program is well-established and is coordinated at the corporate level. Elevance's ERM is considered appropriate for its risk profile but has a lower level of sophistication when compared with some of its peers. Risk identification and reporting are completed on a regular basis, and ERM is incorporated into the corporate strategic planning. There is established oversight and monitoring of the ERM program.

Furthermore, the ratings of WISI reflect its balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate ERM. In addition, the ratings also factor in WISI's strategic importance to the parent.

WISI's rating affirmations reflect its risk-adjusted capitalization at the strongest level at year-end 2024, as measured by BCAR, driven mainly by an improved capital position. WISI's capital growth was supported by its consistent positive earnings and no dividends to the parent company through third-quarter 2025. Elevance has demonstrated explicit and implicit support of WISI in past years. WISI benefits from the parent's operational resources and expertise. WISI's importance to the parent has increased in recent years as the volume of business in the core and the cell has expanded.

WISI is a Hawaii-domiciled captive and a wholly owned subsidiary of Elevance. WISI was established nearly two decades ago primarily for the purpose of formalized self-insurance and an instrument of corporate risk management. In the past several years, Elevance expanded the volume of excess managed care errors and omission (E&O) coverage placed with WISI as the market for this line of business has hardened considerably. In addition, WISI established a segregated cell to assume Federal Employees Health Benefits Program (FEP) premium from Elevance affiliates to optimize capital at statutory entities a few years ago. Furthermore, the cell structure provides a formal separation of FEP from other WISI businesses, provides transparency for Hawaii's regulators and allows for potential future WISI expansion into assuming other health lines. WISI's core operations in the protected cell – FEP premiums – continue to drive revenue and earnings for the company. The core corporate insurance lines of business – workers' compensation and E&O – have posted fluctuating operating results, including lower operating losses over the past couple of years. These results have been driven in part by fluctuations in claims severity and increases in coverage limits, which resulted in the need for reserve strengthening in recent years. WISI expects the consolidated financial performance of the company to be stable in the current year.

WISI's capital growth was supported by its consistent positive earnings and no dividends to the parent company through third-quarter 2025. Elevance has demonstrated explicit and implicit support of WISI in past years. WISI benefits from the parent's operational resources and expertise. WISI's importance to the parent has increased in recent years as the volume of business in the core and the cell has expanded.

Furthermore, the ratings of Granular reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. In addition, the ratings also factor in Granular's strategic importance to the parent.

Granular's ratings reflect its risk-adjusted capitalization at the strongest level at year-end 2024, as measured by BCAR, driven mainly by its capital position. Granular transfers 80% of its risk to an affiliated entity, GranularRe, Inc. (GranularRe), to maintain sufficient risk-adjusted capitalization as it grows business. The rating upgrade of Granular reflects the company's strategic position as part of the Elevance/Anthem organization. Both Granular and GranularRe benefit from the implicit and explicit support of their new ultimate parent. Elevance has shown its willingness to support the two entities and intends to maintain the strongest level of risk-adjusted capitalization collectively between them, as it evaluates alternative capital support for this stop loss business and as the business is strategically integrated into the organization.

A complete listing of Elevance and its subsidiaries' FSRs, Long-Term ICRs and Long- and Short-Term IRs also is available.

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

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