Major health insurers will probably meet expectations when they begin reporting earnings for the fourth quarter of 2012, but investors will be thinking more about how the new year is shaping up, according to analysts who cover the sector.
UnitedHealth Group Inc. (NYSE:UNH), the nation's largest insurer, kicks off earnings reports for managed care companies when it releases results Thursday morning.
Big insurers should at least meet, if not beat, expectations in the quarter, Bernstein analyst Ana Gupte said in a research note. The analyst said concerns about a broad increase in health care use in the fourth quarter, due in part to a recovering economy, appear to be overblown.
Investors and analysts also have worried about an influenza season that is shaping up to be more intense than during recent seasons. A spike in flu claims can hurt insurers' earnings.
Barclays analyst Josh Raskin said in a separate note that concerns about the flu are overstated. Even if the number of cases did increase, the spike may have started in late December, and most of the effect would show up in earnings reports for the first quarter of 2013, Raskin said.
Insurers set aside reserves to cover flu claims, and the illness tends to result in the use of low-cost health services, not catastrophic claims, Raskin said.
