OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Hawaii Dental Service (Honolulu, HI). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in the interactive rating process.
The ratings reflect Hawaii Dental Service’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The rating affirmations reflect Hawaii Dental Service’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by a history of favorable operating performance. Hawaii Dental Service has experienced a trend of strong earnings with high single-digit to low double-digit return on revenue and return on equity. Furthermore, the company has grown net premiums over the past five years via new sales and membership retention.
Offsetting factors include business concentration risk as the business is concentrated in dental products in Hawaii. However, the company has strong brand name recognition as it utilizes the Delta Dental brand name and trademarks. Additionally, Hawaii Dental Service has a growing exposure to mutual funds, which composed approximately 50% of the company’s invested assets at year-end 2019. However, this exposure is slightly mitigated as bond funds represented approximately one-third of mutual funds.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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