OLDWICK, N.J.--(BUSINESS WIRE)--AM Best is maintaining its stable market segment outlook on the U.S. health insurance industry despite the impact of the COVID-19 virus outbreak.
In its new Best’s Market Segment Report, titled, “Market Segment Outlook: U.S. Health,” AM Best details the key factors in maintaining the stable outlook, including the following trends that were apparent through year-end 2019 and into early first-quarter 2020 as the COVID-19 outbreak situation unfolded:
- A trend of strong earnings;
- Strengthened risk-adjusted capitalization;
- Lower-than-estimated utilization and medical cost trends; and
- The cancellation or postponement of visits for routine care and elective procedures.
However, the report also notes that an increase in severity of medical claims from COVID-19, a decline in premiums from COVID-19-related layoffs or furloughs from employer closures related to COVID-19 and potential delays in premium payments from customers are offsetting factors to the stable outlook. Furthermore, the pressures on Medicaid also could be exacerbated as the number of individuals eligible grows as a result of rising unemployment. AM Best notes this impact could be eased by the increase in unemployment compensation associated with the recently signed relief bill, the CARES Act, which may limit the influx of individuals into Medicaid; however, this is unlikely to affect those already at very low compensation levels.
AM Best will continue to monitor the health insurance industry including the impacts on balance sheet strength and operating performance metrics as the situation develops, and provide further outlook updates as warranted. To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=296023.
AM Best is hosting a webinar, titled, “COVID-19 Implications for U.S. Insurance and Reinsurance Markets,” on Thursday, April 9, 2020, at 10 a.m. EDT. During this event, AM Best analysts will discuss U.S. insurance sector and global reinsurance outlooks, as well as discuss additional rating considerations. To register, please go to www.ambest.com/webinars/covid19.
To view current Best’s Market Segment Outlooks, please visit http://www.ambest.com/ratings/RatingOutlook.asp.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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