Investors boost insurers despite economy's impact

[Joanne98]

Source: AP

INDIANAPOLIS (AP) -- Sliding enrollment or rising expenses marred the second-quarter performance for nearly all major health insurers, but sector stock prices have responded with a growth spurt.

Share prices of several companies have climbed around 10 percent since Minnetonka, Minn.-based UnitedHealth Group Inc. became the first insurer to report earnings July 21.

Analysts say they see many positives in insurance stocks when they look beyond factors like slumping enrollment. Investors also are becoming less concerned about how the health care overhaul debate in Washington may affect the industry.

"The group tends to trade on whether investors feel that the companies are pricing the products well enough to cover medical costs, and I think there's some sense that they are," said BMO Capital Markets analyst Dave Shove.

UnitedHealth, WellPoint Inc. and Cigna Corp. all saw their enrollments fall during the quarter largely due to employer job cuts. WellPoint and Aetna Inc. also pointed to rising expenses spurred by the economy as an additional detriment.

Philadelphia-based Cigna said Thursday its second-quarter profit jumped 60 percent. But medical enrollment fell 7 percent to 11.2 million.

The insurer also expects enrollment, which started 2009 at roughly 11.7 million people, to fall as much as 5.5 percent this year.


Read more: http://finance.yahoo.com/news/Investors-boost-insurers-apf-3088102485.html?x=0&.v=1

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Translation. Even though enrollment is dropping we will have no problem rasing rates as soon as the health care show is over in Congress.

[DJ13]

1. Classic Wall Street pump & dump

The big money wants out of insurance stocks prior to the end of Congresses summer recess, so they promote them as the bestest investment ever(!) so they can stick the little guys with the losers.

[John Q. Citizen]

2. Translation: Mandated and subsidized health insurence is a windfall, there won't be a public option

that does anything.