Health Insurers Weather Storms Heading Into 2010

TOM MURPHY

INDIANAPOLIS (AP) — Rising unemployment, swine flu and the threat of health care reform all ganged up on managed care companies in the third quarter and could hurt their performance heading into 2010. But most of the large publicly traded health insurers reported better-than-expected profit growth for the latest period, and analysts still see strong core businesses beneath the challenges facing the industry.

"I would say they're holding their own in a very, very bad situation," BMO Capital Markets analyst Dave Shove said.

On Thursday, Philadelphia-based Cigna Corp. reported a third-quarter profit that soared 92 percent, as improving equity markets helped turn around the performance of a discontinued business the insurer maintains but no longer markets.

Cigna joined Minnetonka, Minn.-based UnitedHealth Group Inc., Hartford, Conn.-based Aetna Inc. and Louisville, Ky.-based Humana Inc. in recording earnings growth that stretched into the double digits compared with the third quarter of 2008, when the economy was mired in a deep slump.

Cigna also reported a drop in commercial health insurance enrollment, another trend it shares with its competitors. All the major health insurers aside from Aetna reported declines in enrollment driven by employers cutting jobs and reducing the number of people covered by private health insurance plans.