A.M. Best Upgrades Rating of Blue Cross Blue Shield of Kansas and Its Subsidiaries

Business Wire, Oct 25, 2005

OLDWICK, N.J. -- A.M. Best Co. has upgraded the financial strength rating to A (Excellent) from A- (Excellent) of Blue Cross Blue Shield of Kansas, Inc. (BCBSKS) (Topeka, KS) and its subsidiaries, Advance Insurance Company of Kansas and Premier Health, Inc. d/b/a Premier Blue. The rating outlook is stable.

The rating upgrade reflects the company's strong earnings and capitalization. Offsetting factors include the potential for challenges in the small group market.

Underwriting results, while tempered from prior years, remain solid since turning positive in 2003. The improved operating performance is a result of a disciplined pricing strategy and lower than expected medical cost trends. Capitalization has improved significantly due to strong earnings. As a result, BCBSKS's strong level of risk-based capital is adequate to support its business risks.

The small group product line, which has been profitable since 2003, had reported significant losses in the past. While A.M. Best does acknowledge the significant turnaround in profitability on this block of business, this segment must be closely watched to circumvent any negative financial impact.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> For current Best's Ratings, independent data and analysis on more than 1,050 health companies and A.M. Best groups, please visit www.ambest.com/health.> A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.