Assurant Health posts ACA-related net operating losses

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Rich Kirchen

Assurant Health is based in downtown Milwaukee.

Rich Kirchen

Senior Reporter- Milwaukee Business Journal

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Assurant Health continued to log net operating losses due to increased claims from Affordable Care-Act-qualified health insurance policies.

Milwaukee-based Assurant Health posted a net operating loss of $17.4 million in the third quarter ending Sept. 30 compared with a net operating income of $6.6 million in the same period of 2013. For the first nine months of 2014, Assurant Health recorded a net operating loss of $27 million compared with a net operating income of $5.3 million in the first nine months of 2013.

The operating loss hit Assurant Health despite net earned premiums, fees and other income increasing 33 percent in the quarter to $537.3 million from $405.6 million in the third quarter of 2013. For the first nine months of 2014, income increased 24 percent, to $1.48 billion, from $1.19 billion a year earlier.

The company said the increased premiums, fees and other income resulted from growth in individual major medical product sales and a $52 million increase in estimated recoveries from the ACA's risk-mitigation program.

The ACA risk-mitigation program is designed to reduce the potential adverse impact to individual health insurers from health care reform provisions, the company said.

Parent company Assurant Inc., of New York City, reported its third-quarter net income increased to $140.3 million, or $1.92 per share, compared with third quarter 2013 net income of $128.8 million, or $1.68 per share. The net-income figure beat analysts estimates of $1.58 per share.

Assurant's net income for the first nine months of 2014 was $421.2 million, or $5.74 per share, compared with $380.1 million, or $4.84 a share, in the first nine months of 2013.

Senior Reporter Rich Kirchen covers health care, sports business, politics and media/advertising for the Milwaukee Business Journal.