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BEST’S RANKINGS
Best’s News & Research Service – January 05, 2024 09:54 AM (EST)
OLDWICK, N.J. //BestWire// – UnitedHealth Group Inc. retained its top position among AM Best’s annual ranking of the world’s top 25 insurers, as ranked by net premiums written, as the health insurer’s 2022 NPW surged 13.7% to $257.16 billion.
The top 10 insurers by NPW were again dominated by health underwriters, as four of the top five insurers were health companies. The full lists, ranked by premiums and by assets, appear in the January 2024 edition of Best’s Review magazine.
No. 2 Centene Corp. retained its position as its NPW rose 13.2%, while No. 3 Elevance Health Inc. also kept its position as NPW rose 13.5%.
Ping An Insurance (Group) Company of China Ltd. remained at No. 5 as its NPW rose 2.3%.
China life Insurance (Group) Co. was the only underwriter in the top 25 to see its NPW fall, down 0.7% as it fell to sixth place from No. 4.
There are several factors impacting premium growth in 2022, according to Sally Rosen, senior director, U.S. health, AM Best.
The largest factor has been Medicaid enrollment growth, driven by the public health emergency. The number of individuals covered by Medicaid managed care continued to grow during the period of the PHE, as states (and insurers) were not allowed to disenroll members during this time, Rosen said. The PHE went into effect in March 2020 and remained in effect until April 2023. Beginning in April 2023, states have 14 months to perform eligibility checks and disenroll those no longer eligible. Medicaid enrollment began to decline in the second half of 2023, and this is expected to continue into 2024.
Continued growth in Medicare Advantage was driven by the aging population, more of whom are electing a Medicare Advantage plan versus traditional fee-for-service Medicare, Rosen said.
The federal government increased subsidies in 2021 for individual exchange plans, which remains in effect through 2025. As a result, more individuals have kept coverage, as well as those opting to enroll in an Affordable Care Act plan, Rosen said.
Elevance Health and UnitedHealth Group experienced mid- to high-single-digit enrollment growth in Medicaid managed care and Medicare Advantage, Rosen said.
Centene experienced almost 20% enrollment growth in Medicare Advantage in 2022, as it expanded its geographic reach, Rosen said. Centene saw mid-single-digit enrollment growth in Medicaid. Additionally, Medicare Advantage’s average premium per member is higher than that of commercial products.
Health insurers are seeing a continuing stream of new state-based Medicaid managed care contracts, which can boost enrollment, Rosen said.
UnitedHealth is closely watching regulatory changes in Medicare and Medicaid as it recorded 14% revenue growth in the third quarter, said its chief executive officer (BestWire, Oct. 13, 2023). Market changes, including regulatory issues, require agility and adaptability for the group, CEO Andrew Witty said in a conference call. Revenue growth was strong in both its Optum and UnitedHealthcare segments, he said.
Looking ahead, Witty said the group is confident in its long-term 13% to 16% growth objective, given its growth so far this year. The group is strengthening its adjusted 2023 earnings outlook, Witty said.
Ping An Group’s nonlife business reported growth in the top line, mainly contributed by motor, guarantee, liability and health insurance premiums, said Lucie Huang, senior financial analyst, China, AM Best.
This growth helped to offset the decline in revenue in the life and health segment, which was partially due to an industry-wide reform of the individual agent distribution channel, coupled with the impact from COVID-19-related restrictions during the year, Huang said. For instance, the number of individual life insurance sales agents of Ping An Life decreased by 25.8% to 445,000 at year-end 2022 from 600,000.
China Life also reported a double-digit decline in its total number of individual agents, Huang said.
Ping An Group and China Life each reported growth in their life and health business in the first half of 2023, supported by the low base effect and improved agent productivity, Huang said. On the nonlife side, motor and liability continued to support premium growth.
Japan’s Dai-ichi Life Holdings Inc. rose to No. 21 from No. 24, as NPW surged 25.4%.
In Japan, the sales increase of single premium foreign currency-denominated products amid higher overseas interest rates environment has contributed to stronger premium incomes of major Japanese life insurers, despite the depreciation of the Japanese yen against the U.S. dollar in 2022, said Charles Chiang, senior financial analyst, Japan, AM Best.
Ranking by Assets
In AM Best’s annual ranking of the top 25 insurers by net nonbanking assets, life insurers dominated but the top insurer was multiple-line underwriter Allianz SE, which retained its No. 1 position even as its assets slipped 10.6% to $1.05 trillion.
Ping An insurance (Group) Company of China Ltd. surged to second from fourth place, as its assets rose 11.4% to $960.68 billion.
Berkshire Hathaway Inc. slipped to No. 3 from No. 2, while China Life Insurance (Group) Co. rose to fourth from fifth place. Axa SA rose to No. 5 from No. 6, although its assets fell 10.5%.
Prudential Financial Inc., which fell to No. 6 from No. 3, saw its assets fall 26.4%.
Seven of the top 10 insurers ranked by nonbanking assets are life insurers.
Despite the Chinese Yuan depreciating by 7.86% against the U.S. dollar in 2022, some of the largest Chinese insurance companies, including Ping An Group and China Life, reported increases in their nonbanking assets, Huang said.
For Ping An Group, the increase was mainly driven by the enlarged investment portfolio; in particular, in the life and health segment, namely Ping An Life and Ping An Health, according to Huang. Similarly for China Life, the increase was supported by growth in available-for-sale securities, including common equities.
Among notable changes in this year’s ranking by nonbanking assets, Legal and General Group plc fell to No. 10 from No. 7.
Despite its assets slide, Legal & General Group posted higher 2022 profit on growth in retirement solutions and a return to profit in U.S. retail life insurance following adverse mortality experience (BestWire, March 10, 2023). Profit for the year attributable to equity holders rose to £2.29 billion ($2.91 billion) from £2.05 billion a year earlier.
(By David Pilla, news editor, BestWire: David.Pilla@ambest.com)
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