Rising medical costs and increasing pressure to hold down premiums may be affecting medical insurance profits.
U.S. health insurers’ gain from underwriting health coverage fell to $2.7 billion in the first quarter, down 2.6% from the total for the first quarter of 2006, according to TheStreet.com Ratings, a unit of The Street.com Inc., New York, that was formerly known as Weiss Ratings.
The firm tracks 643 health insurers.
The insurers’ total net profits increased 14%, to $4.1 billion, but the increase was due largely to an increase in investment gains, TheStreet.com reports.
Investment gains increased to $1.7 billion, from $1.2 billion, and now account for 42% of industry net profits, up from 34% of industry net profits during the first quarter of 2006, TheStreet.com estimates.