OLDWICK, N.J.--(BUSINESS WIRE)--Financial results among eight publicly traded U.S. health insurers were generally favorable for 2017, bolstered in part by premium growth of 5.7%, according to a new A.M. Best special report.
The Best’s Special Report, titled, “Quick Look: U.S. Health GAAP Earnings Review – Year-End 2017,” also attributes the overall results to an 8.6% increase in fees and commissions and a 14.0% rise in net investment income. These favorable trends resulted in an 11.2% increase in operating income, despite four of these companies reporting a decline in this area from 2016. Net income grew more substantially, up nearly 45%, according to A.M. Best’s analysis of the year-end 2017 results.
A decrease in the corporate tax rate under U.S. tax reform will result in a collective $3.7 billion reduction for these publicly traded health insurers, the majority of which will fall to Anthem and UnitedHealth Group, the two largest publicly traded health insurers. Across the board, these publicly traded health insurers are expected to use the additional savings from tax reform to bolster innovation and improve technological capabilities. Cutting medical costs through artificial intelligence, data analytics, product development and other consumer-facing digital technologies appears to be at the forefront of plans to improve efficiencies and the overall consumer experience, according to the report.
A number of negative factors, such as regulatory uncertainty, continue to impact the industry. However, A.M. Best believes that insurers overall have been able to adapt and does not expect any significant deterioration in general market conditions.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=272644.
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