A.M. Best Downgrades Rating of Oregon Dental Service.Business Editors A.M. Best Co. has downgraded the financial strength rating to B++ (Very Good) from A- (Excellent) of Oregon Dental Service (ODS (Operational Data Store) A database designed for queries on transactional data. An ODS is often an interim or staging area for a data warehouse, but differs in that its contents are updated in the course of business, whereas a data warehouse contains static data. ) and assigned a negative outlook. In addition, A.M. Best has affirmed the financial strength ratings of its subsidiaries, ODS Health Plan, B+ (Very Good), and Dentists Benefits Insurance Company, B++ (Very Good), and has placed both companies under negative outlook. The rating of ODS reflects its market presence in the Oregon 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 and its modest underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. performance. Offsetting these strengths are the company's concentration of investments in affiliated and unaffiliated equities, which strained capital and earnings in 2001, along with ODS' single large investment in its ODS Tower and the limited penetration in the small group market. ODS is the 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. in Oregon and one of the founding members of the Delta Dental Plans Association, which is a recognized leader of dental insurance. The company serves over 650,000 members, making it the largest provider of dental benefits in the Oregon market. ODS market share is approximately 26% of the number of employees in the state with dental insurance. This gives ODS the ability to develop and maintain professional and long-standing relationships with dental provider networks. ODS membership declined slightly to approximately 623,000 members, while premium revenue improved 6% to more than $139 million. The company's operating performance improved, reporting an underwriting gain of $41,000 in 2001 compared to an underwriting loss of $103,000 during 2000. A.M. Best believes that the company should continue its improvement in operating performance in the near future. ODS maintains a high level of investments in equities, which are comprised of approximately 65% of invested assets and almost 58% of total assets as of December 31, 2001. The high level of equities ultimately weakened capital due to the poor performance during 2001. ODS experienced a net loss of $887,000 compared to a net gain of $3.4 million during 2000 due to a recognized net loss on investments and realized capital loss of $2.9 million. Furthermore, the company maintains $33.4 million in investments in affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. . A.M. Best anticipates that ODS will address this and bring the level of equity investments to a more reasonable level in accordance with industry practice; however, this may leave the company susceptible to capital fluctuations from the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the equity market. On a consolidated GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, ODS has $65.7 million in assets associated with the ODS Tower Company, a 400,000 square foot office tower in downtown Portland Downtown Portland is located on the west bank of the Willamette River in Portland, Oregon. It is in the northeastern corner of the southwest section of the city and is where most of its high-rise buildings are found. , Oregon, and a $55 million non-recourse loan. Even though a bulk of the building is reported under ODS' subsidiary, ODS Tower, it still encompasses a large portion of the overall organization's assets. The company has a significant share of large corporations domiciled dom·i·cile n. 1. A residence; a home. 2. One's legal residence. v. dom·i·ciled, dom·i·cil·ing, dom·i·ciles v.tr. 1. in Oregon, and ODS recognizes that it must continue to penetrate the small group market in order to sustain its growth. Approximately 90% of the employers in Oregon have fewer than 100 employees. Although ODS' product offering is confined con·fine v. con·fined, con·fin·ing, con·fines v.tr. 1. To keep within bounds; restrict: Please confine your remarks to the issues at hand. See Synonyms at limit. exclusively to dental products, these products are jointly marketed with those of its affiliate, ODS Health Plan. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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