NU Online News Service, May 8, 2003, 11:25 a.m. EDT – Universal American Financial Corp., Rye Brook, N.Y., is reporting $7.5 million in net income for the first quarter on $98 million in revenue, compared with $7.5 million in net income on $82 million in revenue for the first quarter of 2002.
Universal issues insurance policies designed for older consumers and also serves as a broker for “senior market” products from other insurers. It also has a unit, CHCS Services, that administers long-term care insurance programs and other senior market programs for other insurers.
Senior market brokerage profits fell to $3 million, from $4.2 million, because of “excess lapsation in a block of Medicare supplement business,” Universal says.
The lapsation was “caused by a group of former agents who replaced $12 million of our business in another company,” the company adds, explaining that the move forced it to accelerate the amortization of the deferred acquisition cost that it had established for the block.
Profits at CHCS increased 37%, to $2.6 million, and revenue was also up. CHCS has been busy helping MetLife Inc., New York, and John Hancock Financial Services Inc., Boston, administer the new long-term care insurance program they are organizing for federal employees and retirees, Universal says.