Press Release - DECEMBER 11, 2018

Best’s Market Segment Report: U.S. Health Insurance Outlook Held at Stable as Carriers Sustain Positive Trends

 Sally Rosen
Senior Director
+1 908 439-2200, ext. 5280

Doniella Pliss
Associate Director
+1 908 439-2200, ext. 5104

Joseph Zazzera, MBA
+1 908 439-2200, ext. 5797

Christopher Sharkey
Manager, Public Relations
(908) 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
(908) 439 2200, ext. 5644


AM Best is maintaining a stable market segment outlook for the U.S. health insurance industry in 2019, citing positive earnings supported by strong results in all major lines of business, growth of industry capital and surplus and reduced near-term regulatory uncertainty.

A new Best’s Market Segment Report, titled, “Market Segment Outlook: U.S. Health,” states that positive fundamentals continued in 2018 driven by favorable medical cost trend, stable performance of the commercial group market, profitable growth in government programs and sustained improvement in the commercial individual segment. AM Best expects underwriting results to be strong in 2018, though down slightly compared with 2017, when the industry reported its highest earnings in five years. AM Best has seen carriers price closer to medical cost trends in the current year, especially in the individual lines of business where profitability exceeded projections for many carriers in 2017. Strong earnings also are expected to contribute to further growth of capital and surplus, which similarly to 2017, outpaced premium growth. These favorable trends should continue into 2019.

The market segment report outlines other factors that are driving this outlook, including as follows:

  • The individual market’s favorable performance has continued through 2018, as the combination of several years of rate increases, product modifications and stabilization of the risk pool contributed to the segment’s financial turnaround;

  • A change for the individual market in 2019 is the elimination of the health insurance mandate. The mandate and penalty had been viewed as an important factor in preventing adverse selection; however, it no longer serves as a serious incentive to purchase health insurance, and with more than 80% of exchange members relying on premium subsidies to pay for their individual policies, a significant decline in enrollment in 2019 is not expected;

  • The group market remains the largest and most stable component of the health insurance industry. For some carriers, the economic growth and lower level of unemployment resulted in in-group membership growth, which the market has not seen in a number of years; and

  • Government programs remain the industry’s primary source of premium growth, driven by Medicare Advantage and Medicaid managed care.

To access the full copy of this market segment report, please visit .

For a video with Doniella Pliss, associate director, about the U.S. health industry outlook, please visit .

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.