A.M. Best Assigns A -Excellent- Rating To Delta Dental of Wisconsin.OLDWICK, N.J.--(BUSINESS WIRE)--July 23, 1999-- A.M. Best Co. today assigned an A (Excellent) rating to Delta Dental Plan Delta Dental Plan, n.pr an active member organization of the Delta Dental Plans Association (a not-for-profit organization), formed and guided by state dental societies to provide prepaid dental care to the public on a group basis. of Wisconsin. The rating reflects the company's strong presence in the Wisconsin dental insurance Dental insurance is insurance designed to pay the costs associated with dental care. Dental insurance pays a portion of the bills from dentists, hospitals, and other providers of dental services. market, consistent profitability and good capitalization. It also reflects the company's focus on continuous improvement in all areas of operations and its conservative underwriting and investment practices, combined with a willingness to invest in infrastructure. Offsetting these strengths are the company's limited position in the small-group market (under 50 employees), which is a growth area. Delta Dental Delta Dental is the largest and oldest dental plan system in the United States. The Delta Dental Plans Association is comprised of 39 independent Delta Dental member companies operating in all 50 states, the District of Columbia and Puerto Rico. of Wisconsin also faces challenges related to its being a mono-line company. The company serves over 600,000 members. Its market share in Wisconsin has been steadily increasing and now is approximately 24%. The company's focused approach as a single-line entity has enabled it to deliver more product value, higher customer service and stronger client interaction, thus maintaining retention rates around 97%. A.M. Best believes the company's recent growth trends should continue over the near term. Delta Dental has reported both underwriting and operating gains consistently over the past five years and has increased capital and surplus more than 250% since 1994. The company has reported gross underwriting profits Underwriting profit is a term used in the insurance industry. It consists of the earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums. across all lines of business and all market segments. Its book of business is predominately in the private and commercial sector, approximately 90%. The company is a leading administration expense performer within the Delta Dental Plans Association due to its good system capabilities. These efficiencies have reduced expenses 3% since 1995 while growing its book of business. The company's underwriting and pricing strategies There are many ways in which the price of a product can be determined. The following are the foremost strategies that businesses are likely to use. Competition-based pricing Setting the price based upon prices of the similar competitor products. are conservative and priced accordingly; Delta Dental does not position itself to undersell its products. Over the past 10 years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time company has been able to achieve competitive rate increases, thus not experiencing any underwriting cycles. The company will be challenged to maintain its recent growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. longer term, since it operates as a mono-line company. Although it offers various funding methods, its product portfolio is confined to dental-related products, and this concentration is seen as a limitation to companies--especially small to mid-size--that want dental benefits bundled with medical. Since Delta Dental operates as a nonprofit organization Nonprofit Organization An association that is given tax-free status. Donations to a non-profit organization are often tax deductible as well. Notes: Examples of non-profit organizations are charities, hospitals and schools. , it does not have access to the capital markets. This could constrain con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. its future growth. A.M. Best believes that, by pursuing additional joint venture relationships with organizations that have clients in and out of state and by fully capitalizing on existing ones, the company will maximize product distribution and income potential. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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