AM Best said Aetna strengthened its financial position in 2025 following losses and operational challenges a year earlier.
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Hartford-based health insurer Aetna is showing signs of recovery following a challenging 2024 that prompted its parent company, CVS Health, to inject capital into the business, according to a new assessment from insurance rating agency AM Best.
AM Best recently affirmed Aetna's financial strength ratings and stable outlook, citing improved profitability, stronger capitalization and progress in restoring performance after losses tied to rising medical costs and challenges in its Medicare Advantage business.
The assessment offers a positive signal for one of Connecticut's largest health insurers and employers, which has been at the center of CVS Health's broader turnaround efforts.
AM Best said Aetna's underwriting results and earnings improved in 2025, driven in part by stronger Medicare Advantage performance and initiatives aimed at boosting profitability. The ratings agency noted that 88% of Aetna's Medicare Advantage members are now enrolled in plans rated four stars or higher, an important benchmark that can affect reimbursement rates and revenue.
The report follows a difficult 2024, when higher-than-expected medical utilization, weaker Medicare Advantage star ratings and increased Medicaid costs weighed on results. AM Best said CVS Health contributed capital to support Aetna's insurance subsidiaries during that period, reversing a longstanding pattern in which Aetna typically paid significant dividends to its parent company.
The ratings affirmation comes about 18 months after veteran healthcare executive Steve Nelson took over as president of Aetna in November 2024. Nelson inherited the role during a period of financial strain for both Aetna and CVS Health. Since October 2024, CVS has announced more than 1,000 job cuts tied to Aetna as the company has moved to cut costs and streamline operations.
Recent financial results show improvement in the insurer’s performance. CVS Health reported that its Health Care Benefits segment, which includes Aetna, generated $3.04 billion in adjusted operating income during the first quarter of 2026, up 53% from $1.99 billion a year earlier, while revenue increased 3% to $35.97 billion.
AM Best said Aetna's capital position strengthened in 2025 as earnings improved. The agency also noted that premium growth was driven largely by government-sponsored programs, including Medicare Part D business affected by changes under the Inflation Reduction Act.
Aetna exited the individual Affordable Care Act marketplace at the start of 2026, but AM Best said the insurer maintains a strong position in the Medicare, Medicaid and commercial insurance markets nationwide. The agency assigned a stable outlook to Aetna's ratings, indicating it does not expect significant changes to the company's financial condition in the near term.
