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AM Best Comments on Credit Ratings of Anthem, Inc. and Its Subsidiaries Following MMM Holdings, LLC Acquisition Announcement

AM Best has commented that the Credit Ratings (ratings) of Anthem, Inc. (Anthem) (Indianapolis, IN) [NYSE: ANTH] and its insurance subsidiaries remain unchanged following the announcement that the group will acquire MMM Holdings, LLC, including its Puerto Rico-based insurance subsidiaries: MMM Healthcare, LLC (MMM Healthcare), a Medicare Advantage (MA) plan; and MMM Multi Health, LLC (MMM Multi Health), a Medicaid plan. The outlook of these ratings is stable.

The acquisition, if consummated, will further enhance Anthem’s business profile by expanding its footprint and geographic diversification, as the group currently does not have any presence in the Puerto Rico market. Furthermore, it would strengthen Anthem’s position in the MA segment, which has been one of the fastest growing and generally profitable for the health insurance industry over the last several years. Anthem historically was more focused on the commercial segment and somewhat lagged its peers in building a strong presence in government programs, including MA. MMM Healthcare is a market leader in the Puerto Rico MA segment with approximately 267,000 MA members and revenue of $2.7 billion in 2019.

MMM Healthcare recorded about 80% premium growth over the past five years, while maintaining a good level of underwriting profitability. MMM Healthcare is the only MA plan in Puerto Rico with 4.5 star rating from Center for Medicare and Medicaid Service (CMS), a factor that enhances profitability. MMM Multi Health generated smaller revenue of about $613 million in 2019; however, the premium has more than tripled since 2015. Profitability of the Medicaid business has been more volatile compared with MA, and the company posted underwriting losses in three of the last five years. Anthem has a good track record of integrating the newly acquired subsidiaries into the group’s operations, achieving the benefits of greater scale.

The financial terms of transaction were not disclosed; however, AM Best expects the financial leverage of Anthem, which was close to 39% at year-end 2020, to remain within the tolerance level for its current rating. Similar to other recent acquisitions, this transaction is likely to increase the level of goodwill at Anthem, which was about 94% at year-end 2020 and is considered high.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


Doniella Pliss
+1 908 439 2200, ext. 5104

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