Best’s News & Research Service - January 06, 2023 10:06 AM (EST)
Best’s Rankings: US Health Insurers Top List of World’s Largest Insurers
OLDWICK, N.J. //BestWire// - U.S.-based health insurers further strengthened their leading positions at the top of AM Best’s annual ranking of the world’s largest insurers as property/casualty underwriters made notable gains in the ranking by net premiums written.
United Health Group Inc. remained at the top of the list as its NPW rose 12.3% to $226.23 billion, according to AM Best data.
Centene Corp. and Elevance Health Inc. (formerly Anthem Inc.) both advanced two places to come in at second and third.
Centene, Elevance and UnitedHealth all experienced double-digit growth in both Medicaid managed care and Medicare Advantage membership in 2021, said Sally Rosen, senior director, AM Best. Medicare Advantage average premium per member is higher than commercial products.
Additionally, health insurance is seeing a continuing stream of new state-based Medicaid managed care contracts, which can boost enrollment, Rosen said.
There are several factors impacting premium growth in 2021, said Rosen.
The largest factor has been Medicaid enrollment growth driven by the public health emergency due to COVID-19, she said. The number of individuals covered by Medicaid managed care continues to grow during the period of the public health emergency as states (and insurers) are not allowed to dis-enroll members during this time.
The public health emergency went into effect in March 2020 and has continued to be renewed by the federal government and will extend into 2023, according to Rosen.
Another factor is a continued growth in Medicare Advantage driven by the aging population, with many electing a Medicare Advantage plan versus traditional fee-for-service Medicare, Rosen said.
The federal government also increased subsidies for individual exchange plans under the Affordable Care Act, which resulted in an increase in membership, she said.
Rosen also cited the impact of premium rate increases.
The gains made by Centene and Elevance came at the expense of two Chinese insurers — China Life Insurance (Group) Co. Ltd. and Ping An Insurance (Group) Co. of China Ltd. Both of those groups remained in the top five but China Life fell one slot to fourth from third place and Ping An fell to No. 5 from No. 2.
The life segment in China has been going through channel reform since 2021, while the agency force has downsized materially, said Christie Lee, senior director, analytics, AM Best.
Sluggish sales due to the pandemic situation and restrictive COVID-19 policies in China added challenges to growth in 2021, said Lee.
In 2022, life and property/casualty premiums in China increased by 3.5% and 9.9% respectively in the year to date through October, with the latter driven by continued growth of non-automobile lines, Lee said. The number of agents continued to drop during 2022, which will likely drive sales from agency channel down further, she said.
The biggest gains in ranking by NPW were from property/casualty insurers.
Allstate Corp. rose to No. 20 from No. 28 as its NPW gained 18.2% to $45.82 billion. Progressive Corp. rose to No. 19 from No. 25 as its NPW gained 14.4% to $46.41 billion. For Zurich Insurance Group Ltd., NPW rose 10.4% to $44.81 billion as its position in rank rose to No. 21 from No. 26.
The insurer that saw its rank fall the most is Nippon Life Insurance Co., which fell to No. 25 from No. 18.
Another Japanese insurer, Dai-Ichi Life Holdings Inc., fell to No. 24 from No. 22.
The NPW drop of Japanese companies is due to yen depreciation, said Lee. Excluding the impact of exchange rates, both Dai-ichi Life and Nippon Life showed an increase in net premium written, she said
Given its faster growing overseas book, Dai-ichi Life’s growth was much higher than that of Nippon Life, she said.
Nonbank
Looking at AM Best’s top 25 ranking in terms of nonbanking assets, Allianz SE kept its top spot with $1.25 trillion in 2021 net nonbanking assets, up 7.2% from the previous year, the only insurer to make the trillion-dollar mark.
Berkshire Hathaway Inc. rose to second place from fifth and China Life rose to fifth from eighth.
A big gainer was Life Insurance Corp. of India, which rose to 13th from 20th as nonbanking assets rose 11.0% to $560.26 billion.
Great-West Lifeco Inc. saw its position in nonbanking assets rise to No. 19 from No. 22.
Aviva plc declined to No. 20 from No. 12 as nonbanking assets fell 25.3%.
Axa SA’s nonbanking assets fell 3.4% as the insurer sank to sixth from second place.
Japan-based insurers National Mutual Insurance Federation of Agricultural Cooperatives, Japan Post Insurance, Dai-Ichi Life and Nippon Life all slipped in the ranking by nonbanking assets. Meiji Yasuda Life maintained its No. 24 position.
The major driver of Japanese companies falling in rank is yen depreciation, Lee said.
Apart from Japan Post, the other major Japanese companies’ net nonbanking assets generally increased in the low single digits in terms of the Japanese yen, in line with the kinds of returns that can be generated in the investment climate, Lee said.
Subscribers can access the reports and data here and here.
(By David Pilla, news editor, BestWire: David.Pilla@ambest.com)