NU Online News Service, Nov. 3, 2004, 4:57 p.m. EST
Medicare supplement claims raised eyebrows at Ceres Group Inc., Cleveland, during the third quarter.[@@]
The insurer, which sells long term care insurance and ordinary health insurance as well as Medigap coverage, is reporting $5.4 million in net income for the latest quarter on $118 million in revenue, compared with $4.2 million in net income on $130 million in revenue for the third quarter of 2003.
Ceres managed to increase profits even though the Medigap loss ratio increased to 75% for the quarter, up from 64% for the comparable quarter in 2003.
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Ceres is not sure why the loss ratio rose so sharply, according to Tom Killian, the company’s president.
“We continue to analyze the loss ratios and pricing for our Medicare supplement products and are currently conducting a study to gain more information on this unexpected increase in claim frequency,” Killian says in a statement about the increase.