$2.7 billion health insurance start-up posts large losses
It may have been valued at $2.7 billion in its recent round of funding but Oscar Health Insurance Corp. may have some way to go before turning a profit. In filings to state regulators in New York and New Jersey, the start-up posted losses of $92.4 million for NY and $12.8 million for NJ. The combined $105 million drop includes start-up costs but also the usual challenges of being a health insurer.
The firm, which has expanded this year into California and Texas, has formed partnerships with limited healthcare providers and its CEO is optimistic that things will improve: “We don’t see anything right now, really nothing whatsoever, that would suggest that this is not a viable market,” Mario Schlosser told Bloomberg.
In 2015 Oscar’s net premiums were $127.3 million but it spent more than that in health care costs; the industry average is 85 per cent of premiums.
Obamacare adds 20 million insured
The Affordable Care Act has led to an additional 20 million Americans being insured, President Obama said Thursday. There have been 2.4 million newly-insured people since the fall of 2015 officials said. The number of 19 to 25 year olds that are covered has increased by around 6.1 million since Obamacare was introduced in 2010. The official figures show an uninsured rate of 11.5 per cent excluding children and over 65’s. A separate report from the National Health Interview Survey of the entire population during the first 9 months of 2015 showed an uninsured rate of 9.1 per cent.
UK insurers probed for exit costs
Six of the UK’s large insurance companies are being investigated by the country’s financial regulator for the impact of its exit charges for closed-book or ‘zombie’ policies. The Financial Conduct Authority is looking at the costs to life insurance customers of Abbey Life, Countrywide, Old Mutual, Police Mutual, Prudential and Scottish Widows.
Experts believe that the FCA probe could result in higher levels of regulation and additional costs or caps for insurers. The Association of British Insurers says that it will review the findings of the investigation but highlighted that the policies sold today are very different from those in the spotlight. There is no suggestion of any regulation breaches by the insurers being investigated.
