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.”

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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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