OLDWICK, N.J.--()--A.M. Best Co. has commented that the financial strength ratings, issuer credit ratings and debt ratings of Humana Inc. (Humana) (Louisville, KY) (NYSE: HUM) and its insurance and health maintenance organization (HMO) subsidiaries remain unchanged. The outlook for all ratings is stable.
This follows the announcement that Humana’s wholly owned subsidiary, Humana Military Healthcare Services was not awarded the TRICARE contract for the South Region. Humana Military Healthcare Services had held the contract for the South Region since 1996. Approximately 2.9 million members are covered under the current contract, which expires March 31, 2010.
Although the contract contributed positively to Humana’s premium revenue, earnings and cash flow, the loss of the contract is not anticipated to materially affect the operational results of the organization. Humana’s operating margins on the TRICARE business were projected at 2.5%-3.0% for 2009 on premiums of $3.5 billion to $3.6 billion and account for approximately 7% of forecasted full year 2009 operating results. Medicare remains the main driver of Humana’s financial performance, accounting for approximately three-fourths of total operating results.
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Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
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