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.
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.
In other earnings news:
- CIGNA Corp., Philadelphia: The managed care company is reporting $320 million in net income for the third quarter on $4.5 billion in revenue, up from $195 million in net income on $4.8 billion in revenue for the third quarter of 2003. Although CIGNA reaped $88 million in gains by selling its retirement services unit to Prudential Financial Inc., Newark, N.J., income at the operations CIGNA is keeping also rose. Income from continuing operations increased to $242 million, from $204 million.
The company ended the quarter providing or managing medical coverage for 9.9 million people, down from 12 million a year earlier, but successful efforts to manage care and improve underwriting made the business CIGNA retained more profitable, CIGNA says.
- PacifiCare Health Systems Inc., Cypress, Calif.: PacifiCare is reporting $88 million in net income for the third quarter on $3.1 billion in revenue, up from $67 million in net income on $2.7 billion in revenue for the third quarter of 2003.
PacifiCare took about $10 million in charges during the quarter to cover the cost of writing off software and eliminating 241 jobs.