EmblemHealth subsidiaries win AM Best credit rating upgrades as outlook turns positive

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EmblemHealth wins AM Best upgrade

Highlights

AM Best upgraded EmblemHealth subsidiaries' Financial Strength Ratings to C+ from C and Long-Term Issuer Credit Ratings to 'b-' from 'ccc,' with outlook moving to positive from stable.
Capital and surplus increased through 2025, supported by gains from the ConnectiCare, Inc. sale, better underwriting, higher investment income, and a conservative fixed income portfolio.
After prior losses, Emblem posted five consecutive quarters of positive net earnings through Q1 2026, reaching five-year highs in both operating and net income for year-end 2025.

Rating action reflects stronger capital and earnings

As reported by AM Best, the agency has upgraded the Financial Strength Rating to C+ from C and the Long-Term Issuer Credit Ratings to "b-" from "ccc" for Health Insurance Plan of Greater New York, EmblemHealth Insurance Company and EmblemHealth Plan, Inc. The outlook on the ratings is revised to positive from stable for the New York-domiciled subsidiaries of EmblemHealth, Inc.

AM Best says the ratings reflect Emblem's very weak balance sheet strength, marginal operating performance, neutral business profile and marginal enterprise risk management. The balance sheet assessment is driven mainly by weak risk-adjusted capitalization under Best's Capital Adequacy Ratio, though the company starts to reverse earlier capital declines at the end of 2024.

That improvement continues through 2025 as Emblem reports higher capital and surplus, supported by proceeds from the sale of ConnectiCare, Inc., stronger underwriting and higher investment income. AM Best also notes the insurer's conservative investment portfolio, focused on high-grade fixed income, along with high cash and short-term investment levels that support liquidity.

Marked capital gains also allow Health Insurance Plan of Greater New York, the lead operating entity, to complete its capital restoration plan with the New York State Department of Financial Services in 2025 ahead of schedule.

New York market position supports recovery

Before 2025, Emblem records a trend of net and underwriting losses, but multiple strategic changes help produce positive operating and net earnings in the past five consecutive quarters through the first quarter of 2026. For year-end 2025, the group posts a five-year high in both operating and net income.

AM Best says the turnaround is driven mainly by sharply improved underwriting in Medicare Advantage and Medicaid, as well as materially higher investment income. Invested assets also grow significantly in the past two years, with a larger allocation to bonds that supports the rising income trend.

Emblem maintains a solid position in the greater New York City market, where it has operated for 85 years. The insurer also draws a large share of membership from union and labor accounts, led by the City of New York account.

AM Best adds that Emblem's enterprise risk management program is fully developed, with established risk appetite statements and governance structures. The agency says the stronger ERM framework is integral to completing the capital restoration plan and improving operating results.

In our earlier coverage of AM Best’s rating upgrades for EmblemHealth’s New York insurance subsidiaries, we noted that the Financial Strength Rating was raised to C+ and the issuer credit ratings were lifted to b-, with the outlook revised to positive. We highlighted that capital and surplus began recovering from late 2024—supported by ConnectiCare sale proceeds, improved underwriting, and higher investment income—alongside five straight quarters of positive earnings through Q1 2026.

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