Best’s Special Report: Health Mergers and Acquisitions Focus: Vertical Integration, Revenue Diversification and Expansion
2019 APR 16 (NewsRx) -- By a
The analysis in the Best’s Special Report, “Health Mergers and Acquisitions Focus: Vertical Integration, Revenue Diversification and Expansion,” states that the pressure for vertical integration should intensify in the near term, but on a potentially smaller scale. The number of traditional horizontal mergers and acquisitions (M&A) declined in 2018, but included several sizeable deals. However, larger deals will become more difficult, particularly as companies’ health insurance and non-insurance operations both become bigger.
Overall, revenue among this group of health insurers increased 10.9%, resulting from a 9.9% rise in premium revenue, a 12.7% increase in fees and commissions and a 26.2% increase in net investment income.
In 2017, the industry experienced a tax benefit of roughly
Overall, the majority of carriers have taken advantage of low borrowing costs over the last five years to complete a series of acquisitions and maintain higher than historical financial leverage levels. Should the appetite for M&A and vertical integration continue, additional increases in financial leverage over the medium term may be likely.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=28418. AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information. Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED. View source version on businesswire.com: https://www.businesswire.com/news/home/20190402005904/en/
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