Home > News > AP finally reports on insurance industry’s thin margins

AP finally reports on insurance industry’s thin margins

Amazing that the AP finally got around to this.  I reported this months ago and so have many other bloggers.

Actually, its not all that surprising.  What is surprising is that the reported it at all.

While Democrats in Congress have spent months demonizing insurers as greedy villainous monsters, from Barack Obama to Nancy Pelosi to Alan Grayson, the American media stood mute rather than report on the extent of this supposed greed.  Why?  It’s not as if these companies don’t have annual reports, or that business media haven’t tracked their performance.  The publicly-traded companies have their bottom lines exposed for all to see, and yet the media has steadfastly whistled and looked askance rather than inform people about the extent of their demonic, villainous, greedy, filthy lucre.

The AP finally got around to it today … on a Sunday, where it’s likely to be buried:

Quick quiz: What do these enterprises have in common? Farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands and Yahoo? Answer: They’re all more profitable than the health insurance industry. In the health care debate, Democrats and their allies have gone after insurance companies as rapacious profiteers making “immoral” and “obscene” returns while “the bodies pile up.”

Ledgers tell a different reality. Health insurance profit margins typically run about 6 percent, give or take a point or two. That’s anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.

Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans.

The average profit margin for health insurers last year clocked in at an anemic 2.2%. 

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