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A.M. BestTV: Exchange Population Dynamics Cramp U.S. Health Insurers’ Earnings, Says A.M. Best Analyst

This A.M.BestTV episode highlights A.M. Best Vice President Sally Rosen, who talks about how exchange enrollment continues to be older and riskier, which has had a larger negative financial impact than originally anticipated on U.S. health carriers. However, she said, they remain diligent in finding new ways to better compete. Click on http://www.ambest.com/v.asp?v=health316 to view the entire program.

“Those providing coverage to the exchanges, many of them have found that the exchange population is not as large as was expected. They’re higher-utilized risks. They’re higher-risk individuals,” said Rosen. “However, the Medicaid carriers have found, while Medicaid is a lower-margin business, they have to qualify financially. They have picked up a lot more enrollment largely because of the Medicaid expansion that occurred in many states.”

Additionally, Rosen spoke about the advantages that have come to this new health environment. “Scale helps you to lower administrative expenses overall. … The more insured you have, hopefully, can play into getting a better-negotiated rate.”

To access a copy of the Review/Preview special report for the health sector, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=246597.

Recent episodes of A.M.BestTV include:

  • A.M. Best Chief Rating Officer: Property/Casualty Underwriting Profits Continue, Despite Drag From Investments: A.M. Best Chief Rating Officer Stefan Holzberger’s discussion on the potential impact on property/casualty insurers from pricing deterioration and pockets of adverse reserve development. Holzberger also reviews how mergers and acquisitions, regulations and cyber attacks are shaping the overall insurance environment: http://www.ambest.com/v.asp?v=propertycasualty316.
  • A.M. Best Chief Rating Officer: U.S. Life/Annuity Writers Shift to Less-Liquid Holdings, Still Lag on Technology: A.M. Best Chief Rating Officer Stefan Holzberger’s discussion of the state of the U.S. life/annuity market. Holzberger explores insurers’ changing investment portfolios, private equity trends as well as how effectively writers are responding to changes in buying habits: http://www.ambest.com/v.asp?v=fmlifeannuity316.
  • Insurance Securitization Markets Poised For Rebound: New risk sponsors are buying cycles and coverages for nontraditional regions, which in turn is fueling greater interest in insurance linked-securities’ markets: http://www.ambest.com/v.asp?v=ilsoutlook316.
  • Cyber Coverage by the Numbers: The financial impact and coverage shaping today’s cyber liability insurance market are discussed by leading insurers who are responding to the evolving risk: http://www.ambest.com/v.asp?v=cyberbynumbers216.

A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts:

A.M. Best Company
Lee McDonald, +1 908 439 2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com

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