SAN JUAN, Puerto Rico,
Aug. 8, 2019 /PRNewswire/
-- Triple-S Management Corporation (NYSE: GTS), a leading
managed care company in Puerto
Rico, today announced its second quarter 2019 results.
Quarterly Consolidated and Other Highlights
- Net income of $30.9 million, or
$1.35 per diluted share, versus net
loss of $38.7 million, or
$1.68 per share, in the prior-year
period;
- Adjusted net income of $25.7
million, or $1.12 per diluted
share, versus adjusted net loss of $37.3
million, or $1.62 per
share;
- Operating revenues of $878.6
million, a 15.1% increase from the prior-year period,
primarily reflecting higher Managed Care net premiums earned;
- Consolidated loss ratio improved 1,110 basis points to 82.2%,
mostly driven by the unfavorable reserve development related to
Hurricane Maria claims recognized by the Property and Casualty
segment in the second quarter of 2018;
- Medical loss ratio ("MLR") improved 160 basis points to
84.5%;
- Consolidated operating income was $38.2
million, compared to consolidated operating loss of
$63.6 million in the prior-year
period.
"We recorded a strong second quarter, driven by an excellent
performance from our core Managed Care segment, along with solid
results from our Life and P&C segments, leading us to raise our
outlook for full year 2019," said Roberto
Garcia-Rodriguez, President and Chief Executive
Officer. "Our ongoing initiatives to enhance our product
offering and brand are yielding positive results for Triple-S,
reflected in strong year-over-year growth in Managed Care premiums
and stable medical cost trends."
"In pursuit of our overall growth strategy, we remain focused on
creating a unique member experience through a combination of
innovative clinical programs, the evolution of our provider
network, advanced analytics, competitive pricing and superior
service," added Mr. Garcia-Rodriguez. "In addition, effective
yesterday we completed the conversion of our remaining outstanding
Class A shares, simplifying our capital structure into a single
class of common shares and increasing our public float, which
should also enhance long-term value for our
shareholders."
Selected Consolidated Quarterly Details
- Consolidated net premiums earned were $859.5 million, up 15.9% from the prior-year
period, primarily reflecting higher Medicare membership and premium
rates within the Managed Care segment. The increase was partially
offset by lower Medicaid membership resulting from the change in
the program's model and a new entrant to the program in
November 2018.
- Consolidated claims incurred were $706.3
million, up 2.1% year-over-year. Consolidated loss ratio of
82.2% improved 1,110 basis points from the prior-year period,
mostly driven by lower Managed Care MLR on a year-over-year basis,
as well as $76.4 million in
unfavorable prior period reserve development related to Hurricane
Maria recognized by the Property and Casualty segment in the second
quarter of 2018.
- Consolidated operating expenses of $134.1 million decreased by $0.5 million, or 0.4%, from the prior-year period
primarily resulting from $12.2
million in savings due to the suspension in 2019 of the HIP
Fee, offset by higher personnel costs and commission expense. The
Company's operating expense ratio improved 240 basis points
year-over-year to 15.6% mostly driven by the increase in premiums
during the second quarter of 2019.
- Consolidated income tax expense was $12.9 million, compared to an income tax benefit
of $27.9 million in the prior-year
period. Income tax expense in 2019 primarily reflects the increase
in income before taxes in the Managed Care and Property and
Casualty segments. The income tax benefit in the second quarter of
2018 mainly reflects the loss before taxes in that period in the
Property and Casualty segment.
Selected Managed Care Segment Quarterly Details
- Managed Care premiums earned were $793.8
million, up 17.0% year over year.
-
- Medicare premiums earned of $366.0
million increased 30.8% from the prior-year period, largely
due to an increase of approximately 51,000 member months and higher
average premium rates, primarily reflecting a more competitive
product offering and an increase in the average membership risk
score.
- Medicaid premiums earned increased 11.4% from the prior-year
period to $227.0 million, primarily
reflecting higher average premium rates in 2019 offset in part by a
decrease in enrollment of approximately 110,000 member months and
the suspension of the HIP Fee pass-through in 2019. The decrease in
membership was caused by the lower initial membership assigned to
Triple-S by ASES when implementing the new contract effective
November 1, 2018. The increase in
average premium rates is due to the change in the Medicaid model,
where Triple-S now insures members across Puerto Rico, which have higher average premium
rates per member, compared to the previous contract where Triple-S
covered only two regions with lower premium rates per member.
- Commercial premiums earned of $200.8
million increased 3.1% from the prior-year period, mainly
reflecting higher enrollment during the quarter of approximately
15,000 member months and higher average premium rates, offset by
the suspension of the HIP Fee pass-through in 2019.
- Reported MLR of 84.5% improved 160 basis points from the
prior-year period, primarily reflecting favorable prior period
reserve developments. Adjusting for prior period reserve
developments and moving risk-score revenue to its corresponding
period in both the 2019 and 2018 quarters, Managed Care MLR for the
second quarter of 2019 would have been 85.3%, 130 basis points
higher than the prior-year period. This largely reflects the
improved benefits offered in the Medicare 2019 product offering,
the elimination of the HIP Fee pass-through, and the higher target
MLR of the current Medicaid contract.
2019 Outlook
The Company is raising its full year 2019 guidance for
consolidated operating revenue, Managed Care premiums earned, and
adjusted net income per diluted share, reducing its guidance for
operating expense ratio and adjusting its effective tax rate
guidance. It is maintaining its full year 2019 guidance for
its consolidated claims incurred ratio and Managed Care MLR.
More specifically:
- The Company raised consolidated operating revenue expectations
for 2019 to be between $3.29 billion
and $3.33 billion, which includes
Managed Care premiums earned, net between $2.95 billion and $2.99
billion. The Company's previous outlook was for consolidated
operating revenue between $3.11
billion and $3.15 billion,
which included Managed Care premiums earned, net between
$2.78 billion and $2.82 billion;
- The Company continues to expect the consolidated claims
incurred ratio for 2019 to be between 81.3% and 83.3%, and Managed
Care MLR to be between 84.0% and 86.0%;
- The Company is reducing consolidated operating ratio
expectations for 2019 to be between 17.0% and 17.5%. The Company's
previous outlook was for consolidated operating expense ratio to be
between 17.6% and 18.6%;
- The Company is adjusting expectations for its effective tax
rate to be between 29.0% and 33.0% due to an expected increase in
Managed Care operating income, which has a higher tax rate relative
to the other segments. The Company's previous outlook was for
effective tax rate to be between 29.0% and 34.0%; and
- The Company raised adjusted net income per diluted share
expectations for 2019 to be between $2.40 and $2.60,
compared to its previous outlook for adjusted net income per
diluted share between $1.90 and
$2.10. Adjusted net income per
diluted share guidance accounts for the recently issued share
dividend and does not account for any potential share repurchase
activity during 2019. Estimated weighted average diluted share
count for full year 2019 is expected to be 23.44 million
shares.
Conference Call and Webcast
Management will host a conference call and webcast today at
8:30 a.m. Eastern Time to discuss its
financial results for the three months ended June 30, 2019. To participate, callers within the
U.S. and Canada should dial
1-877-451-6152 and international callers should dial 1-201-389-0879
at least five minutes before the call.
To listen to the webcast, participants should visit the
"Investor Relations" section of the Company's website at
www.triplesmanagement.com several minutes before the event is
broadcast and follow the instructions provided to ensure they have
the necessary audio application downloaded and installed. This
program is provided at no charge to the user. An archived version
of the call, also located on the "Investor Relations" section of
Triple-S Management's website, will be available about two hours
after the call ends and for at least the following two weeks. This
news release, along with other information relating to the call,
will be available on the "Investor Relations" section of the
website.
In addition, a replay will be available through August 22, 2019 by calling 1-844-512-2921 or
1-412-317-6671 and entering passcode 13692328. A replay will also
be available at www.triplesmanagement.com for 30 days.
About Triple-S Management Corporation
Triple-S Management Corporation is an independent licensee of
the Blue Cross Blue Shield Association. It is one of the leading
players in the managed care industry in Puerto Rico. Triple-S Management has the
exclusive right to use the Blue Cross Blue Shield name and mark
throughout Puerto Rico, the
U.S. Virgin Islands, and
Costa Rica. With 60 years of
experience in the industry, Triple-S Management offers a broad
portfolio of managed care and related products in the Commercial,
Medicare Advantage, and Medicaid markets under the Blue Cross Blue
Shield marks. It also provides non-Blue Cross Blue Shield
branded life and property and casualty insurance in Puerto Rico. For more information about
Triple-S Management, visit www.triplesmanagement.com or contact
investorrelations@ssspr.com.
Non-GAAP Financial Measures
This earnings release presents information about the Company's
adjusted net income, which is a non-GAAP financial metric provided
as a complement to the results provided in accordance with
accounting principles generally accepted in the United States of America (GAAP). A
reconciliation of adjusted net income to net income, the most
comparable GAAP financial measure, is provided in the accompanying
tables found at the end of this release.
Forward-Looking Statements
This document contains forward-looking statements, as defined in
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include information about possible or
assumed future sales, results of operations, developments,
regulatory approvals or other circumstances. Sentences that include
"believe", "expect", "plan", "intend", "estimate", "anticipate",
"project", "may", "will", "shall", "should" and similar
expressions, whether in the positive or negative, are intended to
identify forward-looking statements.
All forward-looking statements in this news release reflect
management's current views about future events and are based on
assumptions and subject to risks and uncertainties. Consequently,
actual results may differ materially from those expressed here as a
result of various factors, including all the risks discussed and
identified in public filings with the U.S. Securities and Exchange
Commission (SEC).
In addition, the Company operates in a highly competitive,
constantly changing environment, influenced by very large
organizations that have resulted from business combinations,
aggressive marketing and pricing practices of competitors, and
regulatory oversight. The following factors, if markedly different
from the Company's planning assumptions (either individually or in
combination), could cause Triple-S Management's results to differ
materially from those expressed in any forward-looking statements
shared here:
- Trends in health care costs and utilization rates
- Ability to secure sufficient premium rate increases
- Competitor pricing below market trends of increasing costs
- Re-estimates of policy and contract liabilities
- Changes in government laws and regulations of managed care,
life insurance or property and casualty insurance
- Significant acquisitions or divestitures by major
competitors
- Introduction and use of new prescription drugs and
technologies
- A downgrade in the Company's financial strength ratings
- Litigation or legislation targeted at managed care, life
insurance or property and casualty insurance companies
- Ability to contract with providers consistent with past
practice
- Ability to successfully implement the Company's disease
management, utilization management and Star ratings programs
- Ability to maintain Federal Employees, Medicare and Medicaid
contracts
- Volatility in the securities markets and investment losses and
defaults
- General economic downturns, major disasters, and epidemics
This list is not exhaustive. Management believes the
forward-looking statements in this release are reasonable. However,
there is no assurance that the actions, events or results
anticipated by the forward-looking statements will occur or, if any
of them do, what impact they will have on the Company's results of
operations or financial condition. In view of these uncertainties,
investors should not place undue reliance on any forward-looking
statements, which are based on current expectations. In addition,
forward-looking statements are based on information available the
day they are made, and (other than as required by applicable law,
including the securities laws of the
United States) the Company does not intend to update or
revise any of them in light of new information or future
events.
Readers are advised to carefully review and consider the various
disclosures in the Company's SEC reports.
Earnings Release Schedules and Supplemental
Information
Condensed
Consolidated Balance
Sheets.................................................................................
Exhibit I
|
Condensed
Consolidated Statements of
Earnings.....................................................................
Exhibit II
|
Condensed
Consolidated Statements of Cash
Flows................................................................
Exhibit III
|
Segment Performance
Supplemental
Information.....................................................................
Exhibit IV
|
Reconciliation of
Non-GAAP Financial
Measures......................................................................
Exhibit V
|
Exhibit I
Condensed
Consolidated Balance Sheets
|
|
|
|
(dollar amounts in
thousands)
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2019
|
|
December 31,
2018
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
$
|
1,600,180
|
|
$
|
1,564,542
|
|
|
|
Cash and cash
equivalents
|
|
|
166,272
|
|
|
117,544
|
|
|
|
Premium and other
receivables, net
|
|
|
609,523
|
|
|
628,444
|
|
|
|
Deferred policy
acquisition costs and value of business acquired
|
|
225,989
|
|
|
215,159
|
|
|
|
Property and
equipment, net
|
|
|
85,710
|
|
|
81,923
|
|
|
|
Other
assets
|
|
|
149,391
|
|
|
152,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
2,837,065
|
|
$
|
2,760,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy liabilities
and accruals
|
|
$
|
1,545,423
|
|
$
|
1,600,310
|
|
|
|
Accounts payable and
accrued liabilities
|
|
|
342,964
|
|
|
309,747
|
|
|
|
Long-term
borrowings
|
|
|
27,289
|
|
|
28,883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
1,915,676
|
|
|
1,938,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
23,151
|
|
|
22,931
|
|
|
|
|
Other stockholders'
equity
|
|
|
898,922
|
|
|
799,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Triple-S
Management Corporation stockholders' equity
|
|
922,073
|
|
|
821,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interest in consolidated subsidiary
|
|
|
(684)
|
|
|
(676)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
921,389
|
|
|
821,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
2,837,065
|
|
$
|
2,760,248
|
|
|
|
Exhibit II
Condensed
Consolidated Statements of Earnings
|
(dollar amounts in
thousands, except per share data)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums earned,
net
|
|
$
|
859,493
|
|
$
|
741,770
|
|
$
|
1,627,495
|
|
$
|
1,493,804
|
|
Administrative
service fees
|
|
|
2,456
|
|
|
4,066
|
|
|
5,088
|
|
|
7,414
|
|
Net investment
income
|
|
|
15,062
|
|
|
15,707
|
|
|
30,438
|
|
|
29,462
|
|
Other operating
revenues
|
|
|
1,591
|
|
|
1,588
|
|
|
3,168
|
|
|
2,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
revenues
|
|
|
878,602
|
|
|
763,131
|
|
|
1,666,189
|
|
|
1,533,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
investment gains (losses) on sale of securities
|
|
|
2,364
|
|
|
(921)
|
|
|
3,679
|
|
|
2,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized
investment gains (losses) on equity investments
|
|
|
3,323
|
|
|
(776)
|
|
|
22,992
|
|
|
(16,975)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
|
1,705
|
|
|
494
|
|
|
2,874
|
|
|
1,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
|
885,994
|
|
|
761,928
|
|
|
1,695,734
|
|
|
1,520,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims
incurred
|
|
|
|
706,304
|
|
|
692,138
|
|
|
1,329,494
|
|
|
1,311,127
|
|
Operating
expenses
|
|
|
134,084
|
|
|
134,612
|
|
|
266,747
|
|
|
267,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
costs
|
|
|
840,388
|
|
|
826,750
|
|
|
1,596,241
|
|
|
1,578,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
1,831
|
|
|
1,825
|
|
|
3,619
|
|
|
3,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total benefits and
expenses
|
|
|
842,219
|
|
|
828,575
|
|
|
1,599,860
|
|
|
1,582,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
taxes
|
|
|
43,775
|
|
|
(66,647)
|
|
|
95,874
|
|
|
(62,346)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
|
12,849
|
|
|
(27,901)
|
|
|
30,165
|
|
|
(27,514)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
|
30,926
|
|
|
(38,746)
|
|
|
65,709
|
|
|
(34,832)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to the non-controlling interest
|
|
|
(5)
|
|
|
1
|
|
|
(8)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Triple-S Management Corporation
|
$
|
30,931
|
|
$
|
(38,747)
|
|
$
|
65,717
|
|
$
|
(34,833)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Triple-S Management Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
|
$
|
1.35
|
|
$
|
(1.68)
|
|
$
|
2.88
|
|
$
|
(1.50)
|
|
Diluted net income
(loss) per share
|
|
$
|
1.35
|
|
$
|
(1.68)
|
|
$
|
2.87
|
|
$
|
(1.50)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average of
common shares
|
|
|
22,830,399
|
|
|
23,016,447
|
|
|
22,794,297
|
|
|
23,146,318
|
|
Diluted weighted
average of common shares
|
|
|
22,895,000
|
|
|
23,016,447
|
|
|
22,866,691
|
|
|
23,146,318
|
Exhibit III
Condensed
Consolidated Statements of Cash Flows
|
(dollar amounts in
thousands)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
June
30,
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
26,305
|
|
$
|
130,723
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Proceeds from
investments sold or matured:
|
|
|
|
|
|
|
|
|
Securities available
for sale:
|
|
|
|
|
|
|
|
|
|
Fixed maturities
sold
|
|
|
315,495
|
|
|
768,789
|
|
|
|
Fixed maturities
matured/called
|
|
|
14,420
|
|
|
10,656
|
|
|
Securities held to
maturity - fixed maturities matured/called
|
|
|
1,178
|
|
|
728
|
|
|
Equity investments
sold
|
|
|
70,054
|
|
|
123,197
|
|
|
Other invested assets
sold
|
|
|
2,096
|
|
|
1,788
|
|
Acquisition of
investments:
|
|
|
|
|
|
|
|
|
Securities available
for sale - fixed maturities
|
|
|
(291,533)
|
|
|
(829,010)
|
|
|
Securities held to
maturity - fixed maturities
|
|
|
(539)
|
|
|
(893)
|
|
|
Equity
investments
|
|
|
(67,560)
|
|
|
(99,944)
|
|
|
Other invested
assets
|
|
|
(15,424)
|
|
|
(18,649)
|
|
Increase in other
investments
|
|
|
(2,692)
|
|
|
1,817
|
|
Net change in policy
loans
|
|
|
(771)
|
|
|
(372)
|
|
Net capital
expenditures
|
|
|
(10,659)
|
|
|
(9,116)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) investing activities
|
|
|
14,065
|
|
|
(51,009)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Change in outstanding
checks in excess of bank balances
|
|
|
13,189
|
|
|
(1,564)
|
|
Repayments of
long-term borrowings
|
|
|
(1,613)
|
|
|
(1,618)
|
|
Repurchase and
retirement of common stock
|
|
|
(1)
|
|
|
(16,395)
|
|
Proceeds from
policyholder deposits
|
|
|
8,204
|
|
|
11,606
|
|
Surrender of
policyholder deposits
|
|
|
(11,421)
|
|
|
(14,705)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
|
|
8,358
|
|
|
(22,676)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
|
48,728
|
|
|
57,038
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
|
117,544
|
|
|
198,941
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
|
$
|
166,272
|
|
$
|
255,979
|
Exhibit IV
Segment Performance Supplemental Information
(Unaudited)
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
(dollar amounts in
millions)
|
2019
|
2018
|
Percentage
Change
|
|
2019
|
2018
|
Percentage
Change
|
Premiums earned,
net:
|
|
|
|
|
|
|
|
|
Managed
Care:
|
|
|
|
|
|
|
|
|
|
Commercial
|
$
200.8
|
$
194.7
|
3.1%
|
|
$
399.3
|
$
393.5
|
1.5%
|
|
|
Medicare
|
366.0
|
279.8
|
30.8%
|
|
698.6
|
567.7
|
23.1%
|
|
|
Medicaid
|
227.0
|
203.8
|
11.4%
|
|
401.4
|
404.1
|
(0.7%)
|
|
|
|
Total Managed
Care
|
793.8
|
678.3
|
17.0%
|
|
1,499.3
|
1,365.3
|
9.8%
|
|
Life
Insurance
|
45.0
|
41.4
|
8.7%
|
|
89.2
|
82.9
|
7.6%
|
|
Property and
Casualty
|
21.8
|
22.8
|
(4.4%)
|
|
41.1
|
47.0
|
(12.6%)
|
|
Other
|
|
|
(1.1)
|
(0.7)
|
(57.1%)
|
|
(2.1)
|
(1.4)
|
(50.0%)
|
|
|
|
|
Consolidated premiums
earned, net
|
$
859.5
|
$
741.8
|
15.9%
|
|
$
1,627.5
|
$
1,493.8
|
9.0%
|
Operating revenues
(loss): 1
|
|
|
|
|
|
|
|
|
Managed
Care
|
$
802.9
|
$
689.3
|
16.5%
|
|
$
1,518.0
|
$
1,385.5
|
9.6%
|
|
Life
Insurance
|
51.8
|
48.0
|
7.9%
|
|
102.6
|
95.6
|
7.3%
|
|
Property and
Casualty
|
24.1
|
25.6
|
(5.9%)
|
|
46.0
|
52.2
|
(11.9%)
|
|
Other
|
|
|
(0.2)
|
0.2
|
(200.0%)
|
|
(0.4)
|
-
|
(100.0%)
|
|
|
|
|
Consolidated
operating revenues
|
$
878.6
|
$
763.1
|
15.1%
|
|
$
1,666.2
|
$
1,533.3
|
8.7%
|
Operating income
(loss): 2
|
|
|
|
|
|
|
|
|
Managed
Care
|
$
29.3
|
$
1.4
|
1992.9%
|
|
$
51.4
|
$
12.0
|
328.3%
|
|
Life
Insurance
|
5.2
|
5.3
|
(1.9%)
|
|
10.9
|
9.0
|
21.1%
|
|
Property and
Casualty
|
4.8
|
(71.0)
|
106.8%
|
|
8.3
|
(67.9)
|
(112.2%)
|
|
Other
|
|
|
(1.1)
|
0.7
|
(257.1%)
|
|
(0.6)
|
1.4
|
(142.9%)
|
|
|
|
|
Consolidated
operating income (loss)
|
$
38.2
|
$
(63.6)
|
160.1%
|
|
$
70.0
|
$
(45.5)
|
253.8%
|
Operating margin:
3
|
|
|
|
|
|
|
|
|
Managed
Care
|
3.6%
|
0.2%
|
340 bp
|
|
3.4%
|
0.9%
|
250 bp
|
|
Life
Insurance
|
10.0%
|
11.0%
|
-100 bp
|
|
10.6%
|
9.4%
|
120 bp
|
|
Property and
Casualty
|
19.9%
|
(277.3%)
|
29,720 bp
|
|
18.0%
|
(130.1%)
|
14,810 bp
|
|
Consolidated
|
4.3%
|
(8.3%)
|
1,260 bp
|
|
4.2%
|
(3.0%)
|
720 bp
|
Depreciation and
amortization expense
|
$
3.5
|
$
3.6
|
(2.8%)
|
|
$
7.0
|
$
7.0
|
0.0%
|
|
|
1
|
Operating revenues
include premiums earned, net, administrative service fees and net
investment income.
|
2
|
Operating income or
loss include operating revenues minus operating costs. Operating
costs include claims incurred and operating expenses.
|
3
|
Operating margin is
defined as operating income or loss divided by operating
revenues.
|
Managed Care
Additional Data
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
(Unaudited)
|
|
2019
|
2018
|
|
2019
|
2018
|
Member months
enrollment:
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
Fully-insured
|
955,463
|
940,484
|
|
1,908,515
|
1,901,774
|
|
|
Self-insured
|
353,961
|
439,675
|
|
716,451
|
889,453
|
|
|
|
Total
Commercial
|
1,309,424
|
1,380,159
|
|
2,624,966
|
2,791,227
|
|
Medicare
Advantage
|
|
385,835
|
334,887
|
|
769,443
|
673,227
|
|
Medicaid
|
|
1,092,132
|
1,201,743
|
|
2,121,868
|
2,373,088
|
|
|
|
|
Total member
months
|
2,787,391
|
2,916,789
|
|
5,516,277
|
5,837,542
|
Claim liabilities
(in millions)
|
|
|
|
$
423.1
|
$
437.5
|
Days claim
payable
|
|
|
|
57
|
68
|
Premium
PMPM:
|
|
|
|
|
|
|
Managed
Care
|
$
326.21
|
$
273.83
|
|
$
312.37
|
$
275.92
|
|
|
Commercial
|
210.16
|
207.02
|
|
209.22
|
206.91
|
|
|
Medicare
Advantage
|
948.59
|
835.51
|
|
907.93
|
843.25
|
|
|
Medicaid
|
207.85
|
169.59
|
|
189.17
|
170.28
|
Medical loss
ratio:
|
84.5%
|
86.1%
|
|
84.1%
|
85.5%
|
|
Commercial
|
80.9%
|
80.2%
|
|
81.9%
|
80.8%
|
|
Medicare
Advantage
|
82.4%
|
88.4%
|
|
81.5%
|
86.4%
|
|
Medicaid
|
|
91.1%
|
88.5%
|
|
90.7%
|
88.9%
|
Adjusted medical loss
ratio: 1
|
|
85.3%
|
84.0%
|
|
85.6%
|
83.9%
|
|
Commercial
|
|
82.6%
|
84.0%
|
|
82.3%
|
83.4%
|
|
Medicare
Advantage
|
|
83.2%
|
82.5%
|
|
84.3%
|
82.2%
|
|
Medicaid
|
|
91.1%
|
85.8%
|
|
91.4%
|
86.7%
|
Operating expense
ratio:
|
|
|
|
|
|
|
Consolidated
|
15.6%
|
18.0%
|
|
16.3%
|
17.8%
|
|
Managed
Care
|
12.9%
|
15.2%
|
|
13.7%
|
15.0%
|
|
|
|
|
|
|
|
|
|
|
|
1
|
The adjusted medical
loss ratio and adjusted consolidated loss ratio accounts for
subsequent adjustments to estimates, such as prior-period reserve
developments and Medicare premium adjustments, and presents then in
their corresponding period.
|
Managed Care
Membership by Segment
|
As of June
30,
|
|
|
|
|
|
|
2019
|
2018
|
Members:
|
|
|
|
|
|
Commercial:
|
|
|
|
|
Fully-insured
|
318,429
|
312,049
|
|
|
Self-insured
|
117,978
|
145,040
|
|
|
|
Total
Commercial
|
436,407
|
457,089
|
|
Medicare
Advantage
|
|
128,670
|
111,667
|
|
Medicaid
|
|
364,495
|
404,338
|
|
|
|
|
Total
members
|
929,572
|
973,094
|
|
|
|
|
|
|
|
|
Exhibit V
Reconciliation of Non-GAAP Financial Measures
|
|
|
|
|
|
Adjusted Net
Income (Loss)
|
(Unaudited)
|
|
Three months
ended
June 30,
|
Six months
ended
June 30,
|
(dollar amounts in
millions)
|
2019
|
2018
|
|
2019
|
2018
|
Net income
(loss)
|
$
30.9
|
$
(38.7)
|
|
$
65.7
|
$
(34.8)
|
Less
adjustments:
|
|
|
|
|
|
|
Net realized
investment gains (losses), net of tax
|
1.9
|
(0.7)
|
|
2.9
|
1.6
|
|
Unrealized gains
(losses) on equity investments
|
2.7
|
(0.6)
|
|
18.4
|
(13.6)
|
|
Private equity
investment income (loss), net of tax
|
0.7
|
(0.1)
|
|
1.0
|
0.4
|
|
|
Adjusted net income
(loss)
|
$
25.6
|
$
(37.3)
|
|
$
43.4
|
$
(23.2)
|
|
|
Diluted adjusted net
income (loss) per share
|
$
1.12
|
$
(1.62)
|
|
$
1.90
|
$
(1.00)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income (Loss) and Operating Income
(Loss) Excluding Property and Casualty
Unfavorable Development
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
Three months
ended
June 30,
|
Six months
ended
June 30,
|
(dollar amounts in
millions)
|
2019
|
2018
|
|
2019
|
2018
|
Adjusted net income
(loss)
|
$
25.6
|
$
(37.3)
|
|
$
43.4
|
$
(23.2)
|
Less unfavorable
prior period reserve development, net of tax
|
-
|
47.5
|
|
-
|
47.5
|
|
|
Adjusted net income
excluding Property and Casualty
|
|
|
|
|
|
|
|
|
unfavorable prior
period reserve development
|
|
$
25.6
|
$
10.2
|
|
$
43.4
|
$
24.3
|
|
|
Diluted adjusted net
income per share excluding
|
|
|
|
|
|
|
|
|
|
Property and Casualty
unfavorable prior period reserve development
|
|
$
1.12
|
$
0.44
|
|
$
1.90
|
$
1.05
|
Operating income
(loss)
|
|
$
38.2
|
$
(63.6)
|
|
$
70.0
|
$
(45.5)
|
Less unfavorable
prior period reserve development
|
|
-
|
76.4
|
|
-
|
76.4
|
|
|
Operating income
(loss) excluding Property and Casualty
|
|
|
|
|
|
|
|
|
|
unfavorable prior
period reserve development
|
|
$
38.2
|
$
12.8
|
|
$
70.0
|
$
30.9
|
Adjusted net income is a non-GAAP financial metric and should
not be considered a substitute for, or superior to, financial
measures calculated in accordance with GAAP. Management
believes that the use of this adjusted net income and adjusted net
income per share provides investors and management useful
information about the earnings impact of realized and unrealized
investment gains or losses, as well as other non-recurring items
impacting the Company's results of operations. This non-GAAP metric
do not consider all of the items associated with the Company's
operations as determined in accordance with GAAP. As a
result, one should not consider these measures in isolation.
FOR FURTHER
INFORMATION:
|
|
|
|
AT THE
COMPANY:
|
INVESTOR
RELATIONS:
|
Juan José
Román-Jiménez
|
Mr. Garrett
Edson
|
EVP and Chief
Financial Officer
|
ICR
|
(787)
749-4949
|
(787)
792-6488
|
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SOURCE Triple-S Management Corporation