https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3340898?utm_medium=cpc&utm_source=google&utm_campaign=SNL_Banker_Search_Google&utm_term=&utm_content=298712797329&gclid=EAIaIQobChMIt4TV-6PM8wIV3G1vBB1LVgzKEAAYASAAEgIVr_D_BwE
4 replies (most recent on top)
HCSC's MA business performs vastly worse than Cigna's did. The acquired losses are a drop in the bucket.
When a company's Risk-Based Capital (RBC) ratio exceeds 1,000%, it means the company holds 10 times the amount of capital required by regulators. This indicates an exceptionally strong financial position, far above the minimum thresholds for safety and solvency.
From AA+ to AA- Not significant at all.
Two things also mentioned but that were left out here. Cigna’s underperforming business and HCSC’s deep pockets to weather storms.
The acquisition is likely to exacerbate the company's existing pressures in MA, especially since Cigna's government business has been underperforming financially.
HCSC's capitalization is a rating strength, with a statutory surplus of nearly $25 billion and a regulatory risk-based capital (RBC) ratio exceeding 1,000% (based on the authorized control level) in 2024.
“ we believe the company will face integration and execution risks given HCSC's limited acquisition track record”
This made my morning.