Earnings fall sharply at Universal American
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- July
- 30
Universal American Corp., a Rye Brook-based health insurer, reported a sharp drop in profits during the second quarter as it faced investment losses and costs related to a complicated restructuring of its business.
Net income of $4.9 million, or 6 cents a share, dropped from net income of $28.4 million, or 32 cents per share, a year earlier. Revenues were nearly unchanged at $1.2 billion.
Universal American has not escaped fallout from the global financial crisis. The company disclosed last year that it had been hurt by exposure to troubled subprime mortgage investments and Lehman Brothers, the Manhattan-based investment bank that filed for bankruptcy in September.
During the second quarter, the company disclosed that it faced $3.5 million of pretax losses on securities sold and also recorded an additional $4.5 million of impairments.
The company said that it is pursuing a strategy to restructure its investment portfolio to reduce “credit and concentration exposures.” Universal American added that it transferred more than $450 million of assets to a reinsurer—a company that provides insurance to other insurance companies—in connection with the reinsurance of the life and annuity business.
Richard A. Barasch, chairman and chief executive officer, said the company’s core health care businesses continue to perform well. Membership in the company’s Medicare Advantage HMO health plans jumped 16.8 percent to 63,400 members.
The company added that it is taking steps to prepare the company for possible changes that may result from the approval of a health care reform plan in Congress.
“Although we do not yet know exactly what all of the changes will be, we are building and refining the skill sets that are necessary to continue to offer products and services of value to our members,” Barasch said.
This entry was posted
on Thursday, July 30th, 2009 at 2:16 pm by Jay Loomis.
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Category: Earnings
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