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Political uncertainty and rising costs related to the COVID-19 pandemic will drive health insurers to set prices conservatively and invest in new business lines this year.
Given the continuation of the pandemic, health insurers are steeling themselves for a possible bumpy ride. Industry analysts said they expect 2021 to be a volatile year for insurers, although nothing can compare to the dramatic peaks and valleys in profits publicly traded companies reported in the first half of 2020.
Moody’s Investors Service forecasts mid- to single-digit earnings growth among insurers in 2021. “The need to control health costs has been a huge problem for the industry and for the country,” said Dean Ungar, vice president and senior credit officer at Moody’s. “The health insurers know that their future in a way depends on helping keep costs under control without government intervention and government meddling. The insurers are investing in things like value-based care and digital, remote monitoring.”