Fitch Releases U.S. Health Insurance Credit Metrics Update Report

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has published a new report detailing key credit metrics of nine publicly-traded U.S. health insurance and managed care companies that are either rated or followed by Fitch: Aetna Inc., Anthem, Inc., Centene Corp., Cigna Corp., Health Net Inc., Humana, Inc., Molina Health Care Inc. UnitedHealth Group, Inc. and WellCare Health Plans, Inc. The report includes Fitch's projection of key credit metrics as affected by acquisitions and is a desktop guide that provides financial data and rankings, credit strengths and concerns, and current ratings levels and rating sensitivities.

Credit metrics of these health insurers improved in first-half 2015 (1H15) compared with the prior-year period. Strong revenue growth driven by the Affordable Care Act's (ACA) Medicaid expansion and continuing popularity of Medicare Advantage products contributed to revenue growth, and benefit and expense control generated increases in absolute EBITDA and EBITDA-to-revenue margins. Interest coverage ratios improved and leverage ratios declined.

Fitch expects acquisitions announced in 1H15 by Aetna, Anthem, Centene and UnitedHealth Group to reshape the U.S. health sector and its key credit metrics. Collectively, Fitch anticipates these acquisitions adding roughly $55 billion of debt and approximately $36 billion of equity (based on current share prices) to acquirers' balance sheets. From a ratings perspective, Fitch views the heightened leverage these acquisitions will bring as outweighing their competitive benefits.

The first section of the report includes Fitch's acquisition-related projections, revenue growth, EBITDA margin, and return on capital rankings as well as capitalization measures such as debt-to-EBITDA and financial leverage ratios. The second section of the report provides more detailed discussions of the nine individual companies including credit strengths and concerns, rating sensitivities (where applicable), and detailed information about each company's capital structure.

The report 'U.S. Health Insurance: Credit Metrics Update is available on the Fitch web site at 'www.fitchratings.com.'

Additional information is available on www.fitchratings.com

U.S. Health Insurance: Credit Metrics Update

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=870642

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View source version on businesswire.com: http://www.businesswire.com/news/home/20150914005974/en/

Fitch Ratings
Mark Rouck, CPA, CFA
Senior Director
+1-312-368-2085
Fitch Ratings, Inc.
70 W Madison Street
Chicago, IL 60602
or
Seth Williams
Analyst
+1-312-368-2316
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
[email protected]

Source: Fitch Ratings

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