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ARCHIVE | Criteria | Insurance | Health: Double Leverage In Health Insurance Aug 08
Standard & Poors, Aug 2008
Abstract
Over the past several years, rapid consolidation in the managed care industry and unprecedented growth in Medicare and Medicaid programs have changed not only the business profile of many publicly held insurers, but the balance sheets as well. The many large mergers and acquisitions (M&A) were funded by debt as well as equity shares, and very strong earnings supported share repurchase programs. The equity issuance and strong earnings enabled the industry balance sheets to remain relatively benign. However, earnings growth for managed care companies began to slow in 2007. Notwithstanding the consolidation that has reduced the competitive field within the industry, business prospects are narrowing. As a result, many managed care holding companies are taking on increasing levels of leverage...
Companies mentioned in this report are: UnitedHealth Group Inc.
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Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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