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January 11, 2022 at 04:31 PM
What You Need to Know
- Fitch analysts sized up the life and health markets at an outlook conference.
- The analysts see a drop in returns on stocks and alternative investments as a possible challenge for life insurers.
- They expect life and annuity issuer deal activity to remain brisk.
An analyst at Fitch Ratings fears that health insurers may be loving the Medicare Advantage plan market too much.
Bradley Ellis, a senior director and health insurance ratings analyst at Fitch Ratings, talked about health insurers’ hunger for Medicare plan business Tuesday in on online conference the firm held to go over its thoughts about how the insurance sector might look this year.
Humana — a Louisville, Kentucky-based health insurance giant — warned Thursday, in a notice filed with the SEC. that it might end 2022 with just 150,000 to 200,000 more Medicare Advantage plan enrollees. Earlier, the company had estimated it might add 325,000 to 375,000 Medicare Advantage plan enrollees.
“In addition, the company continues to expect group Medicare Advantage membership to be generally flat for 2022, as it does not anticipate any large accounts will be gained or lost as it continues to maintain pricing discipline in a highly competitive market,” Humana said.
Investors reacted by pushing the company’s share price to less than $400, from more than $450 before the notice came out.
Ellis said the remark about the need for “pricing discipline in a highly competitive market” is much more of a concern than the change in the enrollment project.
