Best’s Special Report: US Health Insurers’ Investment Income Grew by 33% in 2023
21 Mayo 2024 - 11:10AM
Business Wire
Net investment income among U.S. heath insurance companies grew
by approximately 33% in 2023 to $10.7 billion, aided by the strong
growth in invested assets driven by higher premiums, as well as the
positive impact of higher interest rates on newly invested assets,
according to a new AM Best report.
The Best’s Special Report, “US Health Insurer Investment Income
Grew by 33% in 2023,” also states that higher interest rates helped
push the gross portfolio yield to 3.33% in 2023 from 2.91% in the
previous year, and 2.45% in 2021. Bond quality improved notably in
2023, with NAIC-1 rated bonds accounting for more than three
quarters (76.9%) of the bond portfolio for the first time since
2019. Conversely, below investment-grade bonds dropped a full
percentage point to 4.3% of bonds. Despite the upward shift in
credit quality in 2023, allocations to NAIC-2 securities are still
six percentage points higher than in 2014.
“Shifts within the fixed income portfolio, generally toward
NAIC-2 securities, is reflective of the shifting investable
universe of bonds toward NAIC-2 ratings,” said Jason Hopper,
associate director, industry research and analytics, AM Best.
“However, U.S. health carriers still have maintained consistently
conservative asset allocations over the past decade to support
insurance liabilities, with minimal changes across the broad asset
classes.”
According to the report, health insurers have been steadily
reducing their allocation to common stocks, accounting for less
than 15% of invested assets in 2023, compared with more than 18% in
2014. At the same time, BA asset allocations have risen modestly in
recent years, with more than half in 2023 affiliated, largely
driven by Blue Cross/Blue Shield companies and investments in
health-related businesses.
“This tilt toward affiliated BA assets allowing the BCBS plans
to leverage their resources while limiting the risk exposure that
comes with direct ownership of non-insurance operations,” said John
McGlynn, senior financial analyst, AM Best. “Larger Blue Cross/Blue
Shield companies may provide services to other BCBS companies
through joint ventures that appear in schedule BA.”
To access the full copy of this special report, please visit
http://www3.ambest.com/bestweek/purchase.asp?record_code=343037.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Jason Hopper Associate Director, Industry Research &
Analytics +1 908 882 2807 jason.hopper@ambest.com John
McGlynn Senior Financial Analyst +1 908 882 2106
john.mcglynn@ambest.com Christopher Sharkey Associate Director,
Public Relations +1 908 882 2310 christopher.sharkey@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com