A bond rating agency has lowered its outlook for Blue Cross and Blue Shield of Minnesota, saying a lack of continuity among top executives raises a governance concern.

New York-based Moody's also cited relatively low profitability at the state's largest nonprofit health insurer as well as a significant decline in membership since 2016.

In November, Dana Erickson became the Eagan-based health insurer's fifth chief executive officer since 2011. Moody's noted that Erickson's predecessor held the CEO job for about three years before stepping down in spring of 2021 — a move that was followed by departures among other top leaders, including the chief financial officer.

"There has been significant turnover in senior management over the past several years," Moody's said in a report this week. "The CFO position remains open at this time. Management's lack of a track record, especially given the challenges facing the company, is a governance concern."

Moody's revised its outlook on its ratings for Blue Cross from stable to negative, but affirmed its assessment of the health insurer's financial strength and debt rating.

Blue Cross said the affirmed ratings reflect the company's strong capital position.

"Under the tenure of a new company president and CEO, we are in the very early stages of implementing a number of long-term strategic and operational initiatives that are focused on having Blue Cross remain financially strong and well-positioned as an insurer-of-choice in an increasingly competitive market," the insurer said in a statement.

When she started the CEO job, Erickson had been a member of the senior leadership at Blue Cross since 2019. She started with the company as senior director of care management in 2015 before ascending to vice president of that same division the following year.

Former chief financial officer Jay Matushak became CFO at Bloomington-based Bright HealthCare in October, according to his LinkedIn page.

Blue Cross and other nonprofit health insurers dominated the state's health plan market for decades, but now are seeing increased competition from for-profit carriers, including Minnetonka-based UnitedHealthcare.

Competition has contributed, Moody's said, to a 23% decline in commercial membership at Blue Cross since 2016. During the time span, the health insurer saw overall membership drop by 11%, the rating agency said, including "a significant drop of 91,000 in 2021."

Moody's says that through the first three quarters of last year, the Blue Cross parent company Aware Inc. posted net income of $180 million on revenue of $5.7 billion.

"The change in outlook to negative from stable reflects several factors," the rating agency said. "Profitability has remained below peer levels even after the completion of its multi-year operating model transformation project."

That transformation project, which included systems modernization and integration, was one of the positives cited by Moody's in July 2018 when the rating agency lowered its outlook for Blue Cross. At the time, the elimination by lawmakers of a 40-year ban on for-profit HMOs in Minnesota was seen as likely opening the door to more competition from national carriers, Moody's reported.

In May 2020, Moody's downgraded the insurer's debt rating one notch while restoring the outlook to stable, based on financial performance and a significant decline in Medicare enrollment at Blue Cross.

With about 3,400 employees, Blue Cross in 2020 posted $183.2 million of operating income on about $6.6 billion of revenue. Performance was an improvement over the previous year and driven largely by a legal settlement over payments in the mid-2010s to carriers under the federal Affordable Care Act.