CHICAGO, May 22 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR) has
reaffirmed the 'A+'(Single-A-Plus) claims paying ability rating of Anthem
Insurance Companies, Inc. (Anthem). In addition, DCR reaffirmed the company's
'A-' (Single-A-Minus) surplus notes rating and '[D-1' (D-One) commercial paper
rating. These ratings affect approximately $500 million of debt. The Outlook
for the ratings is Stable.
Anthem's ratings are supported by the company's strong balance sheet
fundamentals, improving operating performance, expanding geographic
diversification and strong management team. Partially offsetting these
strengths are the evolving regulatory issues surrounding health insurers and
integration issues associated with several recent acquisitions completed by
the company.
With the issuance of $300 million of 10-year surplus notes in February
2000, Anthem's long-term debt as a percentage of total capital has increased
to approximately 27 percent, a level that DCR considers to be in the upper
range for the company's current rating category.
DCR considers the resolution of several outstanding charitable asset
issues in 1999 to be a positive development. Anthem settled with the state
governments of Ohio, Kentucky and Connecticut in connection with the company's
purchase of the Blue Cross Blue Shield plans in these states. In addition, the
company settled with the Office of the Inspector General of the U.S.
Department of Health and Human Services in relation to the Medicare claims
administration activities of the Connecticut Blue Cross Blue Shield plan,
which Anthem purchased in 1997. The investigation involved activities of the
plan prior to its acquisition by Anthem. The settlement of these issues
removes a significant amount of uncertainty from Anthem's operations going
forward.
As its primary operation, Anthem provides health insurance products and
services in Indiana, Kentucky, Ohio, Connecticut, New Hampshire, Colorado and
Nevada under the Blue Cross and Blue Shield trademarks as Anthem Blue Cross
and Blue Shield. The company's pending acquisition of Associated Hospital
Service of Maine, which is the Blue Cross and Blue Shield plan within its home
state, will solidify its position in the New England area. Anthem's large and
concentrated market share, combined with its use of the Blue Cross and Blue
Shield trademarks, provides the company a distinct competitive advantage.
Indianapolis-based Anthem is a mutual insurance and health care company with
1999 consolidated revenue of $6.3 billion, total assets of $5.0 billion and
policyholders' surplus of $1.7 billion. Anthem is one of the largest health
insurance companies in the nation, providing a variety of health, managed care
and indemnity products to approximately 6.4 million people.
For additional information, visit DCR's Web site at http://www.dcrco.com
(Quick Search: Anthem). DCR's research is also available on Bloomberg at
DCR, FirstCall's BondCall Direct/Research Direct at
http://www.firstcall.com and Multex at http://www.multex.com, as well as
through other third-party providers.
SOURCE Duff & Phelps Credit Rating Co.
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Related links:
http://www.dcrco.com
CONTACT:
Bradley S. Ellis, 312-368-2089,
ellis@dcrco.com, or Douglas L. Meyer, CFA. 312-368-2061,
meyer@dcrco.com, both of DCR
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