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  Medical Malpractice Insurers' Profits are Booming

 

  
We Insure One Thing: Our Profits

Insurance premiums for doctors, small businesses and families are on the rise. Millions of Americans are without healthcare. While insurance companies continue to charge outrageously high premiums for decreased coverage, they are reaping outrageously high profits at the expense of American families. The legal rights of people injured through no fault of their own are being trampled…but guess what? The insurance industry is booming.

$25,240,000,000 ($25.24 Billion) = Total profits in 2003 for the Top Ten U.S. insurance
companies according to Forbes.com.1

HMO Profits Doubled in 2003

"The nation's HMOs nearly doubled their net profits last year, earning $10.2 billion in 2003, up from $5.5 billion in 2002 (an 86 percent increase), according to a new report by financial ratings firm Weiss Ratings."2   Some examples of those booming companies are:

  • Blue Cross Blue Shield plans—63% increase in profit
  • Kaiser Foundation Health Plan—$995.5 million profit
  • Physicians Service—$314.2 million profit
  • Group Health Cooperative—$187.8 million profit
  • Aetna Health—$129.8 million profit3

Best Profits in a Decade for Health & Life Insurers

  • According to Weiss Ratings, Inc., "Health and life insurers this year posted their best profits in a decade…those firms jumped $5.9 billion to $8.7 billion in the first three months of 2004."4


Property & Casualty Profits Up

  • "U.S. property and casualty insurers reported surging underwriting profits in the first half of this year amid rate increases from prior years and low catastrophe losses, A.M. Best said. The industry generated $9 billion in underwriting profit in the period…"5
  • According to the insurance industry's main data source, the Insurance Services Office, U.S. property and casualty insurance companies increased profits by 1000% in 2003.6

American Families Pay for Increased CEO Salaries & Profits

  • The aggregate salaries for the CEOs of the Top Ten U.S. insurance companies in 2003 according to Forbes.com totaled $76.6 million, while the companies' profits totaled $25.2 billion.7
  • "The industry's soaring profits continue to irk both consumers and businesses who are shoulder-ing skyrocketing healthcare costs without any perceived improvement in benefits,' said Melissa Gannon, Weiss Ratings vice president."8
  • Companies reporting the largest increases in earnings include9:
    • Pacific Life Insurance Co., $523 million profits in first quarter, up from $99 million for the same period the year prior.
    • Continental Assurance Co., $303.1 million profits in the first quarter, up from $91.2 million loss from the same period the year prior.
    • Insurance & Annuity Association of America, $247.2 million profit, up from a $113.2 million loss from the same period the year prior.

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  1. Forbes 2000 List, Forbes.com, 3/25/04
  2. "HMOs almost doubled net profits in 2003," Laura B. Benko, Modern Healthcare, 8/30/04
  3. "HMOs nearly double profits in 2003," Jacksonville Business Journal, 08/30/04
  4. "Health insurers rake in records," Austin Business Journal, 9/23/04
  5. "P&C insurers post $9B underwriting profit in first half," AFX Asia, 09/21/04
  6. Sharp Increase in P/C Industry's Net Income Propels Surplus Upward in 2003, ISO News Release, 4/14/04
  7. Executive Pay List, Forbes.com, 4/23/04
  8. "Health insurers rake in records," Austin Business Journal, 9/23/04

"Weiss Ratings: Insurers record best profits in a decade," South Florida Business Journal, 09/22/04 
 


Republished with the permission of the Association of Trial Lawyers of America. (October 2004)