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It is still early, and life and health insurers have only reported earnings so far for the first half of 2020, but the insurance industry has not been as battered as you might expect in response to the COVID-19 pandemic. While some costs are up, expenses are lower in other areas. A report published in September 2020 by The Daily Chronicle presented a rosy picture.
 
The Chronicle article summarized a research study, COVID-19 Outbreak – Global Life and Health Insurance Industry Market Report: Development Trends, Threats, Opportunities, and Competitive Landscape in 2020, by analysts at HTF Market Intelligence. It included an analysis of data from some of the world’s largest insurers, health plans, and reinsurers, including Anthem (parent of Anthem Blue Cross in California), State Farm Group, UnitedHealth Group (parent of UnitedHealthcare), Kaiser Foundation Group of Health Plans, Humana Inc., Munich Reinsurance Company, Berkshire Hathaway Inc., CVS Health Corp Group (parent of Aetna), Centene (parent of Health Net in California), and others. The bottom line was that the life and health insurance market is thriving worldwide.
 
Separately reported insurer results echoed (or, rather, predated) that analysis; ThinkAdvisor reported in August on claims for Equitable, Fidelity National, American Financial Group, Prudential, and CNO Financial Group (formerly Conseco, parent of Bankers Life and Casualty as well as Colonial Penn, and Washington National). Through mid-year, most large markets outside the U.S. held down COVID-19 death rates, although U.S. death rates approached 126,000 through June. (As of 9/19, the Centers for Disease Control and Prevention says U.S. deaths are nearly 186,000.)
 
The New York Times reported in August that most of America’s leading health insurers were “experiencing an embarrassment of profits.” Some of the largest insurers, including Anthem, Humana, and UnitedHealth Group reported second quarter profits of $6.7 billion, up from $3.4 billion in the same quarter of 2019.
 
Prior to implementation of the Affordable Care Act, insurers would have been allowed to retain their high profits or pay them out to shareholders; however, the ACA limits profits for participating health plans. The recent higher profits have attracted attention from some in the Trump administration. The U.S. Department of Health & Human Services suggested companies might consider accelerating their required rebating of excess profits or reduce current premiums to help consumers facing economic challenges related to COVID-19.
 
With regard to specific earnings of other insurers, here’s a snapshot:

• CVS Health, parent of CVS Pharmacy and Aetna, said net income for Q2 2020 was $3 billion – about a billion dollars more than in the same period last year – on revenues of $65 billion.
• Anthem’s profits rose to $2.3 billion from $1.1 billion in the first three months of 2019.
• Humana reported its net income rose to $1.8 billion in the quarter, as compared to $940 million in the same quarter of 2019.
• Cigna also reported higher quarterly results, with an earnings surprise of 15.05%. Adjusted income for Q2 2020 was $2.2 billion or $5.81 per share, as compared to $1.6 billion or $4.30 per share in the second quarter on 2019.

 
As The Guardian reported in its August analysis of insurer results, “After a short period of uncertainty, it became clear that the cost of providing medical care would be lower in 2020. People were avoiding the doctor’s office and delaying elective surgeries such as knee replacement.”
 
Only time will tell if the trend toward delayed medical treatment – and higher earnings for health insurers – will continue. As reported by The Detroit News, “estimates compiled by Bloomberg suggest third-quarter earnings will drop off from second quarter highs.”