Anthem profit falls 21.2% as costs normalize on rebound in non-COVID procedures

Anthem profit falls 21.2% as costs normalize on rebound in non-COVID procedures

Anthem profit falls 21.2% as costs normalize on rebound in non-COVID procedures

The office building of health insurer Anthem is seen in Los Angeles, California February 5, 2015. REUTERS/Gus Ruelas

July 21 (Reuters) – Health insurer Anthem Inc (ANTM.N) on Wednesday marginally raised its profit target for 2021 and posted a 15.7% jump in second-quarter sales partly on higher revenue at its unit that includes its pharmacy benefits management business, IngenioRx.

The company said it expected to earn over $25.50 per share in 2021, compared to its previous estimate of over $25.10.

Most U.S. health insurers have been conservative in their 2021 outlooks as they anticipate more uncertainty due to the impact of virus variants and new infection outbreaks in some parts of the country, especially in areas with low vaccination rates.

Bigger rival UnitedHealth Group (UNH.N) last week raised its 2021 adjusted profit forecast for the second time this year, but stuck to its expectation to record $1.80 per share of hit from COVID-19. read more

Anthem said its benefit expense ratio – the percentage of premiums paid for medical services – worsened to 86.8% from 77.9% a year earlier. Analysts on average expected 87.78%, according Refinitiv IBES data.

The increase was driven by a jump in non-COVID and COVID-related healthcare costs as compared to relatively depressed levels in the same quarter a year ago, the company said.

Excluding items, Anthem earned $7.03 per share in the second quarter ended June 30.

Operating revenue from in the company’s pharmacy benefits management business jumped 18% to $6.22 billion, from a year earlier.

Reporting by Manojna Maddipatla in Bengaluru; Editing by Sriraj Kalluvila

Our Standards: The Thomson Reuters Trust Principles.