A.M. Best Special Report: Good Year Overall in 2007; But Income Is Pressured in 2008.OLDWICK, N.J. -- Across the board, GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). results for health insurers were good in 2007, with many companies seeing a larger portion of their revenues coming from government programs. But some companies have already lowered their earnings guidance for 2008 as a result of lower interest rates and high claims experience from the winter's flu season
While earnings are expected to remain positive and overall margins should remain good, the level of overall income has started to come under pressure. Companies competing with the non-profit Blue Cross Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. companies could face pricing pressures as the Blues plans continue to revert re·vert v. 1. To return to a former condition, practice, subject, or belief. 2. To undergo genetic reversion. to driving net income from investment results rather than underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. . Plus, companies with Medicaid contracts could face resistance to rate increases as states try to balance budgets. Current economic conditions also may continue to negatively impact commercial business as employers lay off workers, consolidate coverage and look to lower costs. The following is a recap re·cap 1 tr.v. re·capped, re·cap·ping, re·caps 1. To replace a cap or caplike covering on: recapped the bottle. 2. of 2007 GAAP trends: * Merger and acquisition activity resumed, with 15 transactions announced. * Medical enrollment, excluding stand alone Medicare Part D, grew 3.9%. * Enrollment in stand-alone Medicare Part D plans grew by 3.2%. * Total revenues grew 9.7% year over year, largely driven by a 9.9% increase in premiums. * Management service fees and other revenues increased by 8.2%. * The average medical loss ratio worsened by 20 basis points to 81.6%. * Net income grew by 10.3%. BestWeek subscribers can download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. a PDF (Portable Document Format) The de facto standard for document publishing from Adobe. On the Web, there are countless brochures, data sheets, white papers and technical manuals in the PDF format. copy of all full special reports at no additional cost or a combination of the PDF copies plus all related spreadsheet files of the report data at no additional cost from our Web site at www.bestweek.com. Nonsubscribers can download a PDF copy of the full special report (8 pages) for $55 or a combination of the PDF copy plus the spreadsheet file of the report data for $140 from our Web site at www.bestweek.com. Call customer service for more information, (908) 439-2200, ext. 5742. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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