The report identifies the national insurers’ common credit strengths and weaknesses, and explores the impact of market profiles and size/scale, capitalization and financial performance characteristics on national health insurers’ financial strength ratings, according to a news release.
The report shows that Aetna, Cigna, UnitedHealth Group and WellPoint (Anthem) reported financial leverage ratios that were higher than Fitch’s median guidelines for current rating categories, which was frequently tied to a history of acquisitions, the release reads.
Additionally, the four national health insurers showed a capacity to carry greater debt levels, according to the report. For instance, Cigna and UnitedHealth each reported debt-to-EBITDA and EBITDA-to-interest expense ratios under 1.5x and greater than 15x, respectively.
Fitch said the insurers’ solid performance followed implementation of the Patient Protection and Affordable Care Act, and can be attributed, in part, to a focus on commercial business. More than three-fourths of membership at national health insurers was in commercial business.
The first edition of the “National Health Insurers Dashboard” is available here.
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