Big 5 Health Insurers Report Q4 Profits
The nation’s five largest health insurers totaled a combined $80.25 billion of revenue in the fourth quarter of 2013.
While all five giants saw revenue grow, WellPoint’s and Cigna’s profits declined compared with the fourth quarter of 2012. Four of the insurers pocketed a combined total of $2.31 billion in profit, while Humana posted a fourth-quarter loss of $30 million.
For the year ended Dec. 31, they reported $12.74 billion in profit from $313.68 billion in revenue. Cigna and WellPoint saw their 2013 profits fall compared with 2012, while the other three insurers reported a year-over-year increase in net income.
1. UnitedHealth Group’s earnings in the fourth quarter of fiscal year 2013 increased by nearly 15 percent, from approximately $1.24 billion in 2012 to $1.43 billion in 2013. For the entire 2013 fiscal year, UnitedHealth’s earnings rose 1.8 percent to 5.63 billion.
2. Fourth-quarter net income at WellPoint plummeted 68 percent, from $464.2 million in 2012 to $148.2 million in 2013. The decline was partly driven by a $160.7 million loss on the sale of two eyewear subsidiaries, 1-800 CONTACTS and Glasses.com, as well as higher income taxes. For the full year of 2013, WellPoint reported $2.5 billion in net income, down 6.2 percent from $2.7 billion the previous year.
3. Humana posted a fourth-quarter loss of $30 million, a nearly 116 percent drop from $192 million in profit in the fourth quarter of 2012. The loss was primarily due to a $243 million charge to strengthen reserves for a block of long-term care policies the insurer no longer sells. For the year ended Dec. 31, Humana reported $1.23 billion in net income, up 0.7 percent from $1.22 billion in 2012.
4. Aetna’s net income shot up 94 percent year-over-year, from $190.1 million in 2012 to $368.9 million in 2013. For the year ended Dec. 31, Aetna reported net income of $1.9 billion, a 15 percent increase from nearly $1.7 billion in 2012. The rise in profit was partly driven by the insurer’s acquisition of Coventry Health Care.
5. Cigna’s fourth-quarter net income fell 1 percent, from $406 million in 2012 to $361 million in 2013. The health insurer experienced higher medical costs related to its Medicare Advantage plans. The company also reported a 9 percent year-over-year drop in net income to $1.48 billion for the year ended Dec. 31, driven by its $781 million transaction with Berkshire Hathaway to exit its reinsurance business, which it had been running in run-off mode seeking no new business since 2000.