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April 21, 2022 at 04:11 PM
What You Need to Know
- Medicare Advantage enrollment was higher.
- The number of Medicare supplement insureds was up a little.
- The number of life and disability enrollees was down.
Health insurers have much smaller bond portfolios than life insurance and annuity issuers — but rising interest rates are still helping Anthem.
John Gallina, the Indianapolis-based health insurance giant’s chief financial officer, talked about the effects of efforts by the Federal Reserve Board to push rates higher Wednesday, on a conference call with securities analysts.
Gallina pointed out that Anthem has $35 billion in bonds, notes and other debt securities in its investment portfolio.
“About 30% of that $35 billion is in variable-rate debt,” Gallina said.
Rising interest rates give an immediate boost to returns on the $10 billion in variable-rate debt, he said.
Anthem also owes $23 billion, but less than $2.3 billion of its debt has variable rates.
“So, the rising interest rates are actually a net good guy for us,” Gallina said. “What these interest rates do is give us a lot more flexibility in terms of decisions that we can make.”
The Earnings
Anthem held the conference call to go over its earnings for the first quarter of this year, which ended March 31.
Anthem is reporting $1.8 billion in net income for the latest quarter on $38 billion in revenue, up from $1.7 billion in net income on $33 billion in revenue for the first quarter of 2021.
