Propelled largely by its successful acquisition of Coventry Health Care Inc., Hartford, Conn.-based Aetna Inc. posted the strongest 2013 performance among the five largest publicly traded U.S. health insurers.
Aetna grew its annual revenue 29.2% and its net income 15.4% in 2013. It added nearly 4 million new members, including about 1.4 million fully-insured commercial members.
Aetna was the only top-tier health insurer that increased enrollments in both its fully insured and self-insured commercial medical segments, as well as its Medicare Advantage and Medicaid segments.
“Aetna hit the mark on a number of the metrics that we're interested in. Revenue growth and income growth obviously are among them, but also diversity growth,” said Stephen Zaharuk, New York-based senior vice president at Moody's Investors Services Inc.
“They added a lot of business in the Coventry acquisition, which gives them a lot of new access to growth in some markets where they weren't as strongly represented, both geographically and productwise,” he said.
Analysts said Aetna's investment in its private health insurance exchange, Aetna Marketplace, which it launched for small employer groups last year and plans to expand this year, and its participation in several national and regional third-party exchange platforms have positioned it for organic growth in its employer-sponsored segment.
“While insurers face real and well-documented headwinds related to (health care reform law) implementation, Aetna's core business continues to grow and evolve,” said Jennifer Lynch, a research analyst at New York-based BMO Capital Markets. “We like the company's dedication to full-risk health insurance and believe, through its proprietary exchange and participation in competing ones, Aetna will harness commercial revenue and earnings growth.”