Triple-S Management posts 2Q profit
The insurance services provider posted revenue of $745.9 million in the period. Its adjusted revenue was $741.3 million.
Triple-S Management shares have fallen 25 percent since the beginning of the year. The stock has dropped 33 percent in the last 12 months.
“We are pleased with our quarterly results. Once again our Commercial business experienced additional MLR [medical loss ratio, or benefits divided by total premium] improvement due to the strict underwriting discipline we have been following for several years now. The Medicare and Medicaid operations are making adjustments to compensate for lower premiums and higher drug costs, but trends are positive,” Roberto García Rodríguez, president and CEO, says in the company’s earnings release.
“A key recent development was the agreement between Triple-S and the Puerto Rico Health Insurance Administration, or ASES by its Spanish acronym, to extend the contract to provide health care services through the government’s health insurance program in the Metro North and West regions. The extension, which covers a three-month period that began on July 1, is designed to allow for continuity of services as we conclude negotiations on the contract renewal for the remainder of the current fiscal year. ASES has agreed to new rates that incorporate cost and utilization trends for fiscal 2016-2017. The rate increase should lead to a better second-half showing, further aided by cost saving initiatives implemented by both parties,” he adds.
“While facing the headwinds of the government’s fiscal austerity measures and their broader impact on Puerto Rico’s economy, our strategic transformation remains on course. This quarter’s results reflect the steady progress of our operational improvements, clinical initiatives and investments in technology. Meanwhile, premiums in the Medicare and Medicaid businesses are poised to improve as we move into 2018. We firmly believe these efforts will create incremental value for all of our constituencies, including our loyal shareholder base,” he continued regarding the company’s financial performance.
“In our last earnings release, we provided directional guidance for our Commercial and Medicare businesses, given the proposed changes in the Government Health Plan (GHP) and the broader economic impact of the fiscal control measures required under PROMESA. Although the fiscal control measures have not been entirely implemented, our 90-day extension of the GHP contract gives us more visibility into the outlook of that business, so now we are also providing directional guidance for the GHP.
“In the Commercial business, we expect full-year at-risk member month enrollment to be approximately 4.0 million, plus or minus 5%, reflecting some attrition as well as the addition of new groups. Our MLR now should be in the 83% to 85% range.
“In the Medicare Advantage business, we anticipate full year member month enrollment of about 1.5 million, plus or minus 5%. The expected MLR should be between 90% and 92%.
“Assuming the GHP contract is renewed through the remainder of the year, we expect a member month enrollment of 2.3 million, plus or minus 5%, and an average MLR of 91% for the second half of the year in that business.
“Our ancillary segments are expected to continue showing stable results. In 2017 Life insurance and Property and Casualty premiums are expected to reach $162 million and $90 million, respectively, plus or minus 5%.
“Investment income should be at the same level as in 2016 and administrative expenses now should be in a range of $460 million to $475 million,” he concludes regarding the company’s outlook.
An earnings webcast hosted by the company’s management will be available for at least two weeks at www.triplesmanagement.com.
-The Associated Press contributed to this report