We are very excited to present the first edition of our Health Insurer Financial Insights newsletter. This newsletter focuses on market profitability and capitalization trends for public and non-public health insurers. Our aim is to keep you abreast of key trends and market news that impact market dynamics and profitability. We hope you enjoy the newsletter and find it informative.
Our analysis of 2014-2018 health insurer profitability and capitalization trends highlights how health insurance markets have stabilized over the past two years resulting in improved profit margins and RBC levels. Individual ACA market stabilization has been the primary driver of the overall improved insurer profitability as individual premium rates in 2017 and 2018 finally caught up with higher than anticipated claims costs in the early years of the ACA. Public companies continue to report strong financial results benefiting from both market stabilization and lower corporate tax rates, however, stock prices haven’t seen growth in 2019 like the overall market. While the Cigna/Express Scripts and Aetna/CVS mega mergers have not yet resulted in investor returns, they are reflective of the continued market consolidation and are being carefully watched to see if they realize the promised benefits to consumers.