matched Wall Street estimates Wednesday and said its organic or nonacquisition-driven growth reached 1.2 million members.
The Indianapolis-based health insurer made $652 million, or $1.04 a share, in the fourth quarter ended Dec. 31, up from the year-ago $185 million, or 46 cents a share. The latest quarter included a penny a share in net realized investment losses. Revenue rose 5.8% on a comparable basis from a year ago to $11.3 billion. Analysts were looking for a $1.04-a-share profit on revenue of $11.4 billion.
WellPoint also guided to first-quarter earnings of $1.07 a share and 2006 profit of $4.54, where Wall Street was looking for $1.07 and $4.58.
The benefit expense ratio, reflecting the proportion of premium revenue paid out in benefits, fell to 80.1% in the fourth quarter of 2005, a decrease of 140 basis points, compared with 81.5% in the fourth quarter of 2004. The ratio was 80.6% for the full year of 2005, a decrease of 140 basis points from 82.0% in 2004.
On a comparable basis, the fourth quarter 2005 ratio declined by 110 basis points, compared with 81.2% in the prior year quarter. The full year 2005 ratio declined by 50 basis points from the comparable prior year ratio of 81.1%. The decrease in both the fourth quarter and full year 2005 reflected lower than anticipated medical costs and successful results from the company's medical management and health improvement initiatives.
Medical enrollment totaled 33.9 million members at Dec. 31, 2005, an increase of 6.1 million members since Dec. 31, 2004. The increase included 4.8 million members acquired on Dec. 28, 2005, through the WellChoice transaction.
Organically, enrollment increased by almost 1.2 million members during 2005, with growth realized in every region and across all lines of business. The increase in organic enrollment was driven by the National Accounts business unit and also included strong gains in State Sponsored operations. Enrollment grew organically by 81,000 members during the fourth quarter, with most of the increase in the State Sponsored and National Accounts businesses.
Self-funded membership represented 48% of medical enrollment at Dec. 31, 2005, compared with 50% at Sept. 30, 2005, reflecting the addition of WellChoice's enrollment base during the quarter. Self-funded membership represented 47% of medical enrollment at Dec. 31, 2004.
"Looking back, 2005 was truly an exceptional year for our company as we accomplished a number of milestones including achieving organic growth of 1.2 million members, acquiring WellChoice and Lumenos, delivering strong financial results in all four quarters, and generating $3.3 billion in full-year operating cash flow," said CEO Larry C. Glasscock. "Going forward, we have high expectations for 2006 and believe we are uniquely positioned in the marketplace resulting from our broad portfolio of products, extensive and cost-effective provider networks, and distinctive customer service."