Insurers’ Underwriting Gains Jumped by 77% in 2020
Health plans enjoyed record results in 2020, according to a June 11 report from A.M. Best. The report concludes that the high earnings were driven by the pandemic-driven drop in health care utilization and bolstered by the industry’s “highest level of net premiums written (NPW), with all lines of business reporting premium growth, including commercial business.”
In 2020, carriers took in $41.6 billion in underwriting gains — 77% more than they did in 2019, when they took in $23.5 billion, per the report. The gains in 2020 were found mainly in the second quarter, when utilization plummeted as the result of stay-at-home orders, care deferrals and a sector-wide move to virtual care — a story borne out in other retrospectives of the 2020 claims environment.
While COVID-19 did introduce new costs, the A.M. Best report observes that “the decline in claims for non-COVID conditions helped offset the impact of COVID treatment and testing claims. The majority of individuals diagnosed with COVID were not hospitalized, but instead isolated at home, which resulted in relatively modest claims costs.”