AM Best Information Services

APRIL 14, 2022 08:18 AM (EDT)

Best’s Special Report: Earnings of U.S. Publicly Traded Health Insurers Declines Utilization Approaches Normalcy

 Helen Andersen
Industry Analyst
+1 908 439 2200, ext. 5722

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

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644


OLDWICK - APRIL 14, 2022 08:18 AM (EDT)
Net income at publicly traded U.S. health insurance companies dropped by 6.6% to $36.5 billion in 2021 as an increase in utilization, compounded by higher COVID-19-related costs, negatively impacted earnings, according to a new AM Best report.

The Best’s Special Report, titled, “Earnings of U.S. Publicly Traded Health Insurers Decline as Utilization Approaches Normalcy,” states that after a year of record earnings in 2020, owing to severely suppressed utilization, the publicly traded health insurers experienced near-normal conditions in 2021, as health care usage resurged despite the ongoing COVID-19 pandemic. Insurers were hit with the resumption of elective and routine procedures that were deferred in 2020 and additional medical costs, as COVID-19 variants led to a surge in cases in the second half of the year. However, even with the drop in net income, along with a decline in operating income of 4.9%, or approximately $2.4 billion, overall earnings in 2021 were still favorable and drove 5.9% growth in shareholders’ equity to $251.9 billion.

Other highlights in the report include:

  • Despite the uptick in utilization, total industry revenue grew by 11.5% from year-end 2020, as a result of 11.6% growth in premium revenue, 13.4% growth in fees and commissions and 18.8% growth in net investment income. The accelerated revenue growth has been achieved primarily through mergers and acquisitions, as carriers remain focused on vertical integration.

  • Medicare Advantage (MA) enrollment surged in 2021, up 15.2% year over year. AM Best expects enrollment for MA to continue to grow given the aging U.S. population and as a growing percentage of Medicare-eligible individuals enroll in MA products rather than traditional Medicare.

  • Legislation that prohibited states from dis-enrolling members from Medicaid coverage, combined with general increased enrollment, supported 8.8% growth in 2021. As states have up to 12 months to perform redetermination once the Public Health Emergency ends, AM Best anticipates elevated enrollment into 2023.

  • Commercial enrollment grew by just 2.6% in 2021, with many insurance companies seeing low or negative growth. Premiums were pressured as well, due to factors that include the ongoing group transition to administrative services only (ASO) or self-funded structures.

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

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.