NU Online News Service, April 29, 2004, 5:47 p.m. EDT – Strong niche health insurance product revenue boosted first-quarter earnings at UICI, North Richland Hills, Texas.[@@]
The insurer is reporting $38.4 million in net income for the quarter on $494.7 million in revenue, up from $21.1 million in net income on $411.2 million in revenue for the first quarter of 2003.
Claims were much higher than expected at a unit that sells insurance to students, and the company wrote off some assets associated with a closed block of life insurance business.
New sales were flat at a unit that sells health coverage to the self-employed, but renewals for coverage for the self-employed were high, UICI says.
Because the share of self-employed business coming from renewals increased, the cost of paying commissions on new sales fell, the company says.
One UICI unit, the Star HRG division, sells limited-benefit health insurance policies to workers who cannot afford conventional, comprehensive health coverage.
UICI had to increase rates both on new accounts and on renewal accounts because of high claims rates, but earned premium revenue increased 24% at the unit, to $34.8 million, UICI says.