Standard & Poor’s this week reaffirmed its A-minus rating on Horizon Healthcare Services Inc. — which does business as Horizon Blue Cross Blue Shield of New Jersey — and said the rating reflects Horizon’s “strong core market presence, very good and improving operating earnings and very strong level of risk-based capitalization.”
An S&P spokesman said the rating is a strong one, and has been in place since 2008. The rating carries a stable outlook with little likelihood of changing in the next 12 to 24 months. Offsetting its strengths are “a highly competitive marketplace and a concentration in New Jersey,” S&P said.
Since 2005, Horizon’s membership — at 3.59 million members, the largest insurer in the state — has increased about 11 percent, “demonstrating the company’s strategic pricing decision in selected market segments, competitive product portfolio and broad provider networks,” S&P said. Membership could increase by about 2 percent this year, to 3.64 million, S&P said.
S&P said it expects Horizon’s return on revenue will exceed 2 percent this year, and said Horizon’s 2010 adjusted pretax income was $248 million for a return on revenue of 2.9 percent, beating the 2008 to 2010 average of 2.2 percent.
S&P said Horizon’s “brand strength and extensive network of health care providers provide a strong basis for the company to perform well in the fiercely competitive New Jersey marketplace.”