AM Best has affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) and the Long and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR) of UnitedHealth Group Incorporated (UnitedHealth Group) (Minnetonka, MN) [NYSE: UNH]. Concurrently AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) of the health and dental insurance subsidiaries of UnitedHealth Group, collectively referred to as UnitedHealthcare.
In addition, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Centurion Casualty Company (Centurion Casualty) (Omaha, NE). The outlook of all these Credit Ratings (ratings) is stable.
The ratings of UnitedHealthcare reflect its balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, very favorable business profile and appropriate enterprise risk management (ERM).
UnitedHealthcare’s strong balance sheet strength assessment is supported by strong risk-adjusted capital, as measured by Best’s Capital Adequacy Ratio (BCAR). The moderation in risk-adjusted capitalization from historical levels reflects lower operating earnings and reduced profitability in 2025, although statutory capitalization remains solid and is managed within the organization’s targeted range. Invested assets remain conservative, being held predominantly in investment-grade fixed-income securities and cash and short-term investments. The company’s liquidity remains favorable, supported by operating cash flows, a short-duration investment portfolio and significant cash balances, supplemented by internal credit facilities for the majority of its statutory entities. Improving earnings during 2026 are expected to support UnitedHealthcare’s capital generation.
UnitedHealthcare’s strong operating performance assessment reflects overall favorable underwriting and net income results, although earnings remain below historical levels following the significant deterioration experienced in 2025. The decline in 2025 earnings was driven primarily by elevated medical expenses in Medicare Advantage, along with broader medical cost pressures and government program funding challenges. However, operating trends have improved materially during the first half of 2026 as strategic market exits, benefit redesign, pricing discipline and medical cost management actions have begun to improve profitability. UnitedHealthcare’s second-quarter 2026 operating margin improved to 4.6% from 2.4% in the prior-year period; as a result, UnitedHealth Group lowered its full-year medical care ratio outlook and raised its 2026 operating earnings guidance for UnitedHealthcare. AM Best expects margins to continue improving during 2026, although Medicare Advantage membership contraction and Medicaid funding pressure remain important considerations.
UnitedHealthcare maintains a leading market position across its major lines of business and nationally. The company has strong business and geographic diversification, with product offerings across commercial, Medicare and Medicaid markets. During 2026, UnitedHealthcare has shifted its strategic emphasis from rapid membership expansion toward operational discipline, margin recovery and selective portfolio right-sizing, including exits from underperforming Medicare Advantage markets and products. The company’s strategic actions in 2026 include repricing products and adjusting benefit designs to better reflect elevated medical cost trends, while prioritizing sustainable profitability over membership growth.
UnitedHealthcare has material scale with a large, diverse membership base. UnitedHealthcare continues to emphasize value-based care arrangements as an avenue to better manage medical costs and improve quality of care. The organization also continues to leverage its integration with Optum, advanced data analytics and technology to improve care delivery, pricing, medical management and administrative efficiencies.
UnitedHealth Group has a mature ERM program that spans its health insurance and health services businesses. ERM is used both in daily operations and for strategic long-term business planning. The organization maintains a comprehensive framework for risk identification, monitoring, economic capital modeling and stress testing. AM Best continues to monitor execution risk associated with changes in senior management, as well as heightened regulatory, reputational and cybersecurity risks. The organization has adjusted its business strategy toward repricing, margin recovery and portfolio right-sizing following the medical cost pressures experienced in 2025. However, the magnitude of the prior Medicare Advantage performance deterioration demonstrates the potential for rapidly changing utilization, pricing and funding trends to challenge even a mature risk management framework.
The ratings of Centurion Casualty reflect its balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate ERM.
Centurion Casualty is a property/casualty (P/C) company offering travel protection products, including trip cancellation and medical coverage branded as UnitedHealthcare Global SafeTrip. The company remains relatively new, with 2023 being its first full year of operation. Premium development has been slower than originally anticipated, and the company reported a small loss in 2025 as it continues to build sufficient scale to support fixed costs. However, loss ratios are developing within company expectations, distribution is expanding through external administrator and aggregator relationships, and material premium growth is anticipated over the coming years. Centurion Casualty maintains the strongest level of risk-adjusted capitalization, as measured by BCAR, although capitalization is expected to moderate as premium volume expands.
Centurion Casualty continues to expand its geographic footprint and is approved to offer its SafeTrip products in 48 states, with products active in 47 states and the District of Columbia. Additional state approvals are expected over the medium term. UnitedHealth Group is expected to retain Centurion Casualty’s earnings and provide additional capital contributions as needed to support growth. The company remains strategically important to UnitedHealth Group by providing P/C licenses and travel insurance product capabilities.
UnitedHealth Group has strong financial flexibility with a high level of unregulated cash flow from its Optum health services businesses. Overall earnings declined materially in 2025 as elevated medical costs and Medicare and Medicaid funding pressures reduced profitability at UnitedHealthcare, while Optum also experienced operating pressures. However, earnings have improved materially during 2026. Through the first half of 2026, consolidated operating earnings increased 19%, with improved earnings from both UnitedHealthcare and Optum. Optum continues to provide substantial earnings diversification and unrestricted cash flow to the parent, reducing UnitedHealth Group’s reliance on dividends from its regulated insurance subsidiaries to service debt and other holding company obligations.
UnitedHealth Group’s financial leverage remains elevated but has improved during 2026. Debt-to-capital declined to approximately 41.3% at June 30, 2026, from approximately 43.7% at year-end 2025, as measured by AM Best, and management continues to target financial leverage of approximately 40% over the long term. Interest coverage also has improved materially as earnings have recovered. AM Best expects UnitedHealth Group to continue progressing toward its targeted leverage level while balancing capital requirements at regulated subsidiaries, debt reduction, shareholder returns and strategic investments. The group continues to maintain a high level of goodwill and intangible assets, largely associated with Optum acquisitions; however, goodwill remained relatively stable through the first half of 2026 while growth in shareholders’ equity improved the ratio of goodwill and intangibles to equity.
Strong liquidity is driven by favorable operating cash flows, parent company cash, substantial non-regulated cash flows, a commercial paper program and a $21 billion revolving credit facility. UnitedHealth Group has demonstrated flexibility in its capital management, including reducing acquisition activity and share repurchases during periods of greater capital needs, while maintaining the ability to provide capital support to its regulated insurance subsidiaries.
A complete listing of UnitedHealth Group Incorporated and its subsidiaries’ FSRs, Long-Term ICRs and Long- and Short-Term IRs is available.
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