A.M. Best indices: health insurance stocks led the way in 2006.
Stories about rising health-care costs may have dominated the headlines in 2005, but they appear not to have scared investors off of the health insurance sector, as stocks in the A.M. Best Health & HMO HMO health maintenance organization.
A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, Index saw a whopping 41.96% rise from their position at year-end 2004.
Perhaps buoyed by the planned roll-out of Medicare's universal prescription-drug benefit programs, from which some health plans anticipate billions of dollars in new revenue, health insurance stocks outpaced all other sectors of the industry, including four of the top 10 slots among individual performers.
Humana Inc, Health Net Inc., Coventry Health Care Coventry Health Care, Inc. (Coventry) (NYSE: CVH) is a managed health care company in the United States. On February 8th of 2007 Coventry agreed to acquire Concentra's Workers Compensation Managed Care Services Businesses. External links
At the opposite end of the performance scale were property/casualty stocks, with many hampered by record losses from hurricanes Katrina, Rita, and Wilma. The Property/Casualty Index still saw gains on the whole, rising 7.07% from year-end 2004, but it contributed nine of the bottom 10 individual performers. Hit particularly hard was Montpelier Re Holdings Ltd., with shares down 50.85% on the year after suffering a third quarter that saw the company post a net loss of $875.1 million anda combined ratio--losses and expenses as a percentage of premiums--of 422.6.
However, some individual P/C companies managed to shine through. Among the brightest was medical-malpractice writer SCPIE SCPIE Southern California Physicians Insurance Exchange Holdings Inc., which saw its shares more than double--up 109.26%, more than any other insurer--on vastly improved fundamentals, both at the company level and in the underlying medical-malpractice market.
The brokerage sector likewise saw more modest growth, up 9.31%, as many firms sought to completely remake re·make
tr.v. re·made , re·mak·ing, re·makes
To make again or anew.
1. The act of remaking.
2. Something in remade form, especially a new version of an earlier movie or song. their business models after New York state Attorney General The New York State Attorney General is the chief legal officer of the State of New York. The office has been in existence in some form since 1626, under the Dutch colonial government of New York. Eliot Spitzer's probe of bid-rigging allegations at Marsh & McLennan Cos. In the wake of the Spitzer investigations, most of the largest brokers announced they would henceforth eschew es·chew
tr.v. es·chewed, es·chew·ing, es·chews
To avoid; shun. See Synonyms at escape.
[Middle English escheuen, from Old French eschivir, of Germanic origin contingent commissions Contingent commissions is a term used in the American insurance industry for any kind of broker's commission which is contingent upon some event occurring (instead of a commission paid on the sale itself). In the UK this form of payment is known as Overriders. and placement service fees, while several sold off their interests in ancillary operations--such as wholesale brokerages, reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. intermediaries, and underwriters--that were criticized as presenting the potential for monopolistic "tying" arrangements.
The life sector straddled a middle ground between the "go-go" performance of health insurers and the more modest returns seen by property insurers. On the year, A.M. Best's Life Index rose a healthy 22.17%, combining with the health stocks to push the aggregate Life/Health & HMO Index up 31.89%.