AM Best Affirms Aetna Subsidiaries’ Credit Ratings for CVS Health

AM Best on June 5, 2026 affirmed credit ratings for CVS Health Corporation’s Aetna Inc. subsidiaries, maintaining an “A (Excellent)” Financial Strength Rating (FSR) and an “a (Excellent)” Long-Term Issuer Credit Rating (Long-Term ICR) for Aetna Life Insurance Company (ALIC) and other members of the Aetna Health & Life Group. The outlook for these ratings was described as stable in the agency’s release.

AM Best’s action covers Aetna Health & Life Group operating entities and wholly owned subsidiaries of Aetna’s ultimate parent, CVS Health (NYSE: CVS). The agency also affirmed the same rating levels for Allina Health and Aetna Insurance Company, two companies tied to Aetna through a joint-venture structure, and for CVS Caremark Indemnity Ltd. in Bermuda. AM Best said the ratings reflect, among other factors, “very strong” balance-sheet strength, strong operating performance, favorable business profile, and “appropriate” enterprise risk management (ERM).

To explain the rating rationale, AM Best pointed to risk-adjusted capitalization measured by its Best Capital Adequacy Ratio (BCAR). The agency said the Aetna Health & Life Group had historically paid “large dividends” to its parents while sustaining the strongest levels of risk-adjusted capitalization. That pattern reversed in 2024, when CVS Health contributed capital to its insurance subsidiaries to support losses and growth in the business. AM Best said capital improved during 2025 as earnings drove improvements, and that dividends paid to the parent were lower than normal and are expected to return to historical levels in the near term.

AM Best also linked its assessment to how Aetna manages liquidity and investments. The release said investments for the group primarily consist of investment-grade fixed-income securities, schedule BA assets, and cash and cash equivalents, with liquidity supported by access to the Federal Home Loan Bank of Boston at the lead entity, Aetna Life Insurance Company. The agency further noted that Aetna’s reinsurance structure includes traditional reinsurance with highly rated carriers, plus a quota share reinsurance agreement with Health Re, Inc. and excess-of-loss protection through Vitality Re entities.

On operating performance, AM Best said 2025 net premium written growth was driven by a “strong increase” in government programs, including changes to Medicare Part D linked to the Inflation Reduction Act, as well as rating actions. It said membership declined, “primarily” due to the group’s repricing strategy, partially offsetting the government-program growth.

The agency said underwriting and net earnings improved in 2025, supported by an improvement in Medicare Advantage Star Ratings. AM Best reported that 88% of members were in a four-plus star rated plan, alongside initiatives to improve profitability. It contrasted that with 2024, describing underwriting losses as driven by increased utilization, an unfavorable impact from the decline in Medicare Advantage Star Ratings for the 2024 payment year, and higher acuity in Medicaid.

Two rating themes were stressed as remaining key sensitivities. First, AM Best said capital actions by CVS Health in 2024 contributed to elevated leverage at the parent, even as leverage declined slightly in 2025 due to lower debt outstanding and improved earnings. Second, while the release described the ratings as stable, it did not provide detailed forward-looking financial guidance or specific covenant headroom. For investors and policyholders, the main watch item is whether underwriting trends, dividend capacity, and parent leverage continue to support the stable outlook.

AM Best’s “A (Excellent)” FSR reflects an insurer’s “excellent ability” to meet ongoing policy and contract obligations, while the “a (Excellent)” Long-Term ICR reflects an entity’s “excellent ability” to meet ongoing senior financial obligations. (AM Best also cautions that these are independent opinions and not recommendations to buy or sell insurance-related obligations.) Next, market participants will likely focus on whether Aetna’s Medicare Advantage performance and utilization trends hold up beyond 2025, and whether the parent’s leverage and dividend trajectory remain consistent with the rating agency’s stability view.