Summary
This article clearly shows to me that insurers will price business to sell when it makes no sense which results in them telling Wall Street they underpriced the business. We see them so crazy competitive on cases that nobody else even wants just to bring their total membership up to please Wall Street as they are focused on the outcome of a quarter and not the year...shortsighted. The largest insurer is way off on their profitability projections.
Analysis
Other key carriers will watch this, but I believe it will not change how they price things, in fact they may even get more aggressive seeing Wellpoint is struggling meaning Wellpoint will raise their rates. The sector will take a hit from a stock price standpoint.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
