UnitedHealth’s 2Q profit climbs 13 percent

When are we going to see lower trend numbers in renewals and projections.  This will not be uncommon for the major carriers.

Ammunition for renewal negotiations:

UnitedHealth Group Inc., with operations in Hartford, said Tuesday its second-quarter earnings rose 13 percent, as enrollment gains helped fuel revenue growth and consumers continued to moderate their health care system use, The Associated Press reports.

The Minnetonka, Minn., insurer also hiked its 2011 profit forecast by 20 cents per share after raising it in the first quarter as well.

UnitedHealth’s enrollment grew 5 percent to 34.2 million compared to last year’s second quarter, led by gains in commercial coverage, which includes employer-sponsored and individual plans. That contributed to an 8 percent jump in revenue from UnitedHealthcare, the company’s largest segment.

Revenue also swelled 19 percent to $7 billion for UnitedHealth’s Optum segment, which offers health management, consulting and pharmacy services.

Health care use that has climbed at a slower rate than insurers expected when they set premiums has helped the industry in recent quarters, and UnitedHealth said it continues to benefit from that. Insurers have said they expected health care use to return to normal levels later this year, but some analysts disagree.

They say the slumping economy has helped rein in use, and health plans that make patients more aware of the cost of care also may be having an impact.

UnitedHealth earned $1.27 billion, or $1.16 per share, in the three months that ended June 30. That’s up from $1.12 billion, or 99 cents per share, in the same quarter last year. Revenue rose 8 percent to $25.23 billion.

Analysts surveyed by FactSet forecast earnings of 91 cents per share on $25.22 billion in revenue.

About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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