As Markets Crash, Analysts Try to Predict What Pandemic May Mean for Insurers’ Finances

Health insurance stocks were not spared on March 12, the worst trading day on Wall Street since Black Monday in 1987. UnitedHealth Group, Cigna Corp., Anthem, Inc., and Humana Inc. all closed at least 9% down from the day before. Analysts say the gloomy view of payers is justified, despite carriers’ efforts to boost investor confidence.

In a March 9 note describing financial models of the COVID-19 pandemic based on the 2018 flu season, Credit Suisse analyst A.J. Rice projected “a negative EPS [earnings per share] impact relative to our 2020 EPS estimates ranging from 1.6% for Cigna to 14.4% for Humana” for the first quarter of 2020, adding that “for the full year, this results in negative EPS impact of 0.8% for Cigna to 3.7% for Humana.”

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Peter Johnson

Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

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