EmblemHealth subsidiaries secure AM Best rating upgrade as capital and earnings improve

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EmblemHealth rating upgrade

Highlights

AM Best upgrades EmblemHealth subsidiaries’ Financial Strength Rating to C+ from C and Long-Term Issuer Credit Ratings to b- from ccc, outlook revised to positive.
Capital and surplus for EmblemHealth trend upward at end of 2024, bolstered by unrealized capital gains and ConnectiCare, Inc. sale proceeds, continuing through 2025.
EmblemHealth posts five consecutive quarters of positive operating and net income through Q1 2026, reaching a five-year earnings high at 2025 year-end, mainly from Medicare Advantage, Medicaid underwriting, and higher investment income.

Rating action reflects stronger capital recovery

As reported by AM Best, the agency has upgraded the Financial Strength Rating of Health Insurance Plan of Greater New York, EmblemHealth Insurance Company and EmblemHealth Plan, Inc. to C+ from C, and raised their Long-Term Issuer Credit Ratings to b- from ccc. All three insurers are subsidiaries of EmblemHealth, Inc., are domiciled in New York, and are collectively referred to as Emblem.

AM Best says the ratings reflect Emblem’s balance sheet strength, which it still assesses as very weak, alongside marginal operating performance, a neutral business profile and marginal enterprise risk management. The outlook on the ratings is revised to positive from stable.

The agency says Emblem’s balance sheet assessment is driven largely by weak risk-adjusted capitalization under Best's Capital Adequacy Ratio. After a period of capital declines, absolute capital and surplus begin trending upward at the end of 2024, helped by unrealized capital gains that offset operating losses, and that improvement continues through 2025 with proceeds from the sale of ConnectiCare, Inc. and stronger underwriting and investment income.

Operating gains support outlook in New York market

Before 2025, Emblem posts a trend of net and underwriting losses, but a series of strategic changes leads to positive operating and net earnings in the past five consecutive quarters through the first quarter of 2026. AM Best says the company reaches a five-year high in both operating and net income at year-end 2025, supported mainly by improved underwriting in Medicare Advantage and Medicaid and by materially higher investment income.

Invested assets grow significantly over the past two years, with a higher allocation to bonds and a conservative portfolio focused on high-grade fixed income. The company also maintains high levels of cash and short-term investments, adding liquidity, while the capital improvement allows Health Insurance Plan of Greater New York to complete its capital restoration plan with the New York State Department of Financial Services in 2025, ahead of schedule.

Emblem keeps a solid position in the greater New York City health insurance market, supported by an 85-year presence and a membership base tied heavily to union and labor accounts, including the City of New York account. AM Best also says the insurer’s fully developed enterprise risk management program, including established risk appetite statements and governance structures, plays an integral role in completing the capital restoration plan and improving operating results.

In our earlier article on AM Best’s rating action for Hurst Home Insurance Company in Kentucky, we explained that the agency revised the outlook to stable from negative while affirming the insurer’s A- Financial Strength Rating and 'a-' credit rating. We noted that improved profitability in 2025–2026—supported by rate increases, re-underwriting, and a more favorable loss environment—helped offset pressures seen in 2022–2024, even as the company’s Kentucky concentration kept exposure to local economic and weather-related risks in focus.

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