Fitch Ratings affirmed the insurer financial strength rating assigned to Blue Shield of California at A.

The ratings outlook was revised to stable from negative.

The rating reflects the company's very strong capitalization and leverage characteristics, overall good earnings and strong business profile, which reflects the company's diverse enrollment base and strong competitive position in California, balanced against its single-state geographic business concentration and continued uncertainty derived from the evolving regulatory environment.

The revision of the ratings outlook reflects a significant improvement in the insurer's operating performance in 2017 relative to 2016, as well as moderate improvement in the company's risk-adjusted capitalization.

Fitch revised the ratings outlook to negative from stable on June 2, 2016, reflecting deterioration in the company's risk-adjusted capitalization to levels driven by its 2015 acquisition of Care1st Health Plan.