A.M. Best Upgrades Rating of Arkansas Blue Cross & Blue Shield

Arkansas Blue Cross & Blue Shield's financial strength rating has been upgraded by A.M. Best Co. of Oldwick, N.J., to A (Excellent) from A- (Excellent). The rating outlook is stable.

The Little Rock insurance company's rating is based on continued favorable earnings over the past five years.

The primary drivers of the organization's earnings trend are its "significant market operations that are supported by a large membership base that is well ahead of the competition, as well as almost complete participation by provider networks within Arkansas," the news release said.

The Best release also said Blue Cross "exhibits a highly efficient administrative infrastructure, and reliable underwriting helps to ensure favorable operating margins, while maintaining a very strong capitalization that has grown in the past five years.

"ABCBS has embarked on a definitive business diversification strategy that is expected to strongly influence and add cohesiveness among mutual and not-for-profit Blue Plans in the southern region of the United States after bringing renewed focus and innovation to a broad suite of traditional ancillary products. This evolving business profile is expected to lower operating costs, help in alleviating geographic concentration risk and broaden ABCBS' reach within the region, while establishing a national presence for non-branded products."

A.M. Best said in the release that it believes Blue Cross "is in an optimal position to make the necessary changes to strengthen its operations and to promote itself as a regional player in the life/health insurance marketplace."