Health Plans
Intelligence Unit Special Reports Special Events Subscribe Sponsored Departments Follow Us

Twitter Facebook LinkedIn RSS

BCBS Companies Took Loss in 2008

John Commins, for HealthLeaders Media, August 11, 2009

Blue Cross Blue Shield companies posted an aggregate 40.9% year-over-year decline in income in 2008 because of realized losses, and declines in underwriting and investment income, a new analysis by the credit rating firm A.M. Best Co. shows.

Best's analysis of Blue Cross Blue Shield plans found:

  • A 6.6% increase in net premiums written (NPW) was reported. The 2008 NPW growth rate was slightly higher than that of 2007, 5.9%, but lower than 2006's 9.1% rise.

  • The healthcare expense ratio improved 20 basis points to 85.9%.

  • A 10.3% decline in capital and surplus—to $41.6 billion—was reported, bringing that key measure back down to a level not seen since 2005.

  • There was a 30 basis points decline in the sales, general and administrative expense ratio in 2008, after remaining flat in 2007.

  • Underwriting earnings declined for the third year in a row, although the 5.5% decrease in 2008 was much less than the 24.6% and 8.5% declines in 2007 and 2006, respectively.

  • Given the 2008 financial market turmoil combined with the low interest rate environment, investment income declined by 19%.

  • An unrealized loss of $3.1 billion was reported for 2008, compared with gains of $285.5 million in 2007 and $1.9 billion in 2006.

John Commins is a senior editor with HealthLeaders Media.

Comments are moderated. Please be patient.