Highline Data: Health Profits Falter

December 21, 2009 at 07:00 PM

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U.S. health insurers faced a drop in underwriting gains and net income during the first 3 quarters of 2009.

Analysts at Highline Data, Cambridge, Mass., have published data supporting that conclusion in a review of the financial reports that U.S. health insurers and managed care companies have filed with the National Association of Insurance Commissioners, Kansas City, Mo., and the California Department of Managed Health Care.

The companies' total net income for the first 3 quarters of the year fell to $8.2 billion, down about 12% from the total for the comparable period in 2008, the analysts report.

The companies' combined revenue was up about 6%, but their combined underwriting gain was down about 22%.

"While the public perception is that health companies are recording record profits, the reality they face is clearly a reduction in profit margins," says Laurie Dallaire, vice president and director of Highline Data. "Even before the anticipated impact of pending health reform legislation, the industry will continue to see depressed margins as companies strive to control premiums and benefits costs."

Highline Data is a division of Summit Business Media L.L.C., Erlanger, Ky., which is also the parent of the National Underwriter Company and the NU Online News Service.

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