SAN JUAN, Puerto Rico,
Nov. 7, 2019 /PRNewswire/ -- Triple-S
Management Corporation (NYSE: GTS), a leading managed care company
in Puerto Rico, today announced
its third quarter 2019 results.
Quarterly Consolidated and Other Highlights
- Net income of $13.9 million, or
$0.58 per diluted share, versus net
loss of $17.6 million, or
$0.77 per share, in the prior-year
period;
- Adjusted net income of $12.1
million, or $0.51 per diluted
share, versus adjusted net loss of $22.2
million, or $0.97 per share,
in the prior-year period;
- Operating revenues of $836.0
million, a 9.4% increase from the prior-year period,
primarily reflecting higher Managed Care net premiums earned;
- Consolidated loss ratio decreased 400 basis points to 83.4%
versus the third quarter of 2018; this results from the unfavorable
reserve development related to Hurricane Maria claims recognized by
the Property and Casualty ("P&C") segment in the prior-year
period;
- Medical loss ratio ("MLR") increased 320 basis points to
86.4%;
- Consolidated operating income was $19.0
million, compared to consolidated operating loss of
$25.6 million in the prior-year
period;
- Expansion of share repurchase program to $25 million of availability, approved subsequent
to quarter end.
"We had a solid third quarter, mainly driven by year-over-year
growth in Medicare premiums and valuable bottom line contributions
from our Life and P&C segments," said Roberto Garcia-Rodriguez, President and Chief
Executive Officer. "We've continued strengthening our product
offerings, improving the overall quality of service, and advancing
our goal of creating a unique and optimal member experience."
"With respect to our P&C segment, our quarterly review of
outstanding claims reaffirms our belief that our reserves remain
adequate as of September 30, 2019,"
added Mr. Garcia-Rodriguez. "Given our confidence in the
Company's long-term strategy and our belief that its stock is
undervalued, our Board has expanded our share repurchase program's
availability to $25 million. We
anticipate commencing repurchases under the program during the week
of November 11, 2019."
Selected Consolidated Quarterly Details
- Consolidated net premiums earned were $815.0 million, up 9.8% from the prior-year
period, primarily reflecting higher average premium rates within
the Managed Care segment and an increase in membership in the
Medicare and fully insured Commercial businesses. The increase was
partially offset by lower Medicaid membership.
- Consolidated claims incurred were $680.0
million, up 4.8% year-over-year. Consolidated loss ratio of
83.4% improved 400 basis points from the prior-year period, driven
by the $52.3 million unfavorable
prior period reserve development related to Hurricane Maria
recognized by the P&C segment in the third quarter of 2018 that
did not recur in the third quarter of 2019.
- Consolidated operating expenses of $136.9 million decreased by $4.1 million, or 2.9%, from the prior-year
period, primarily resulting from savings due to the suspension in
2019 of the HIP Fee, partially offset by higher personnel costs and
commission expense. The Company's operating expense ratio improved
220 basis points year-over-year to 16.7%, mostly driven by the
increase in premiums during the third quarter of 2019.
- Consolidated income tax expense was $5.9
million, compared to an income tax benefit of $3.4 million in the prior-year period. The income
tax benefit in the third quarter of 2018 mainly reflects the loss
before taxes in that period incurred by the P&C segment.
Selected Managed Care Segment Quarterly Details
- Managed Care premiums earned were $746.5
million, up 9.7% year over year.
-
- Medicare premiums earned of $367.1
million increased 29.4% from the prior-year period, largely
due to an increase of approximately 52,000 member months and higher
average premium rates, primarily reflecting a more competitive
product offering and an increase in the average membership risk
score.
- Commercial premiums earned of $203.1
million increased 2.9% from the prior-year period, mainly
reflecting higher fully insured enrollment during the quarter of
approximately 25,000 member months and higher average premium
rates, partially offset by the suspension of the HIP Fee
pass-through in 2019.
- Medicaid premiums earned decreased 11.8% from the prior-year
period to $176.3 million, primarily
reflecting a decrease in membership of approximately 126,000 member
months, and the suspension of the HIP Fee pass-through in 2019. The
decrease in membership follows the lower membership assigned to
Triple-S by ASES when implementing the new Medicaid contract that
became effective November 1,
2018.
- Reported MLR of 86.4% increased 320 basis points from the
prior-year period. This increase largely reflected the improved
benefits offered in the Medicare Advantage 2019 product offering,
the elimination of the HIP Fee pass-through, and the higher target
MLR of the current Medicaid contract.
Update on P&C Segment Reserves related to Hurricane
María
As of September 30, 2019:
- Triple-S Propiedad, Inc. (TSP), the Company's P&C
subsidiary, has paid a cumulative amount of $692 million in claims related to Hurricane
María. Estimated gross losses remain unchanged at $967 million.
- TSP received 10 new claims during the third quarter, increasing
the total number of claims to 17,746. It has closed approximately
96% of these claims. 709 claims remain open.
- The Company evaluated any developments involving open claims,
including new information that arose from lawsuits in which TSP has
been served, as is customary when the Company conducts its
quarterly review of TSP's reserve levels. In addition, as described
below, the Company conducted additional analysis of case reserves
for claims in which lawsuits have been filed against TSP but not
served.
- TSP has been served with process in 218 lawsuits related to the
709 claims that remain open.
- The Company conducted a search of the Puerto Rico court system's electronic docket
to identify lawsuits filed against TSP with respect to which TSP
has not been served. This docket is a public record over which the
Company has no control; furthermore, the Company is unable to
verify its accuracy or completeness.
- The docket search identified an additional 178 lawsuits filed
against TSP that have not yet been served as required by law. All
of them relate to claims previously registered with and evaluated
by the Company.
- The Company then performed additional analysis of case reserves
for claims in which lawsuits have been filed against TSP but not
served. Based on this analysis, as well as the customary review
described above, the Company determined that there is no need to
increase its estimate of gross losses nor adjust reserves related
to Hurricane María.
- As is the case for all claim liabilities, the gross losses
related to Hurricane Maria are based on the Company's best estimate
of the ultimate expected cost of claims with the information
currently on hand and are subject to change.
Results of Internal Investigation Related to Vital
RFP
As previously disclosed in an 8-K filed with the Securities and
Exchange Commission on July 30, 2019,
the Company's audit committee of independent directors engaged
outside counsel to conduct a proactive investigation into the
Company's participation in the Vital RFP process. That
investigation is substantially complete and has not uncovered any
evidence of attempts by the Company to improperly influence the
outcome of the Vital RFP process.
2019 Outlook
The Company is raising its full year 2019 guidance for adjusted
net income per diluted share and reducing its guidance for
operating expense ratio. It is maintaining its full year 2019
guidance for its consolidated operating income revenue, Managed
Care premiums, consolidated claims incurred ratio and Managed Care
MLR ratio. More specifically:
- The Company continues to expect consolidated operating revenue
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 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 16.75% and 17.25%. The
Company's previous outlook was for consolidated operating expense
ratio to be between 17.0% and 17.5%;
- The Company continues to expect its effective tax rate to be
between 29.0% and 33.0%; and
- The Company raised adjusted net income per diluted share
expectations for 2019 to be between $2.50 and $2.70,
compared to its previous outlook for adjusted net income per
diluted share between $2.40 and
$2.60. Adjusted net income per
diluted share guidance accounts for the August 2019 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 23.443 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 September 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 November 21, 2019 by calling 1-844-512-2921 or
1-412-317-6671 and entering passcode 13695866. 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2019
|
|
December 31,
2018
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
$
|
1,645,703
|
|
$
|
1,564,542
|
Cash and cash
equivalents
|
|
|
98,932
|
|
|
117,544
|
Premium and other
receivables, net
|
|
|
608,305
|
|
|
628,444
|
Deferred policy
acquisition costs and value of business acquired
|
|
232,948
|
|
|
215,159
|
Property and
equipment, net
|
|
|
86,299
|
|
|
81,923
|
Other
assets
|
|
|
158,179
|
|
|
152,636
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
2,830,366
|
|
$
|
2,760,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy liabilities
and accruals
|
|
$
|
1,493,612
|
|
$
|
1,600,310
|
Accounts payable and
accrued liabilities
|
|
|
361,571
|
|
|
309,747
|
Long-term
borrowings
|
|
|
26,492
|
|
|
28,883
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
1,881,675
|
|
|
1,938,940
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common
stock
|
|
|
24,333
|
|
|
22,931
|
|
Other stockholders'
equity
|
|
|
925,044
|
|
|
799,053
|
|
|
|
|
|
|
|
|
|
|
|
Total Triple-S
Management Corporation stockholders' equity
|
|
949,377
|
|
|
821,984
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interest in consolidated subsidiary
|
|
|
(686)
|
|
|
(676)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
948,691
|
|
|
821,308
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
2,830,366
|
|
$
|
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 Nine
Months Ended
|
|
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums earned,
net
|
|
$
|
815,021
|
|
$
|
742,445
|
|
$
|
2,442,516
|
|
$
|
2,236,249
|
|
Administrative
service fees
|
|
|
2,607
|
|
|
3,802
|
|
|
7,695
|
|
|
11,216
|
|
Net investment
income
|
|
|
15,176
|
|
|
16,168
|
|
|
45,614
|
|
|
45,630
|
|
Other operating
revenues
|
|
|
3,167
|
|
|
1,575
|
|
|
6,335
|
|
|
4,234
|
|
|
Total operating
revenues
|
|
|
835,971
|
|
|
763,990
|
|
|
2,502,160
|
|
|
2,297,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
investment gains (losses) on sale of securities
|
|
|
1,087
|
|
|
(956)
|
|
|
4,766
|
|
|
1,065
|
|
Net unrealized
investment gains (losses) on equity investments
|
|
|
1,267
|
|
|
5,632
|
|
|
24,259
|
|
|
(11,343)
|
|
Other income,
net
|
|
|
485
|
|
|
1,943
|
|
|
3,359
|
|
|
3,600
|
|
|
Total
revenues
|
|
|
838,810
|
|
|
770,609
|
|
|
2,534,544
|
|
|
2,290,651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims
incurred
|
|
|
|
680,010
|
|
|
648,580
|
|
|
2,009,504
|
|
|
1,959,707
|
|
Operating
expenses
|
|
|
136,882
|
|
|
141,026
|
|
|
403,629
|
|
|
408,772
|
|
|
Total operating
costs
|
|
|
816,892
|
|
|
789,606
|
|
|
2,413,133
|
|
|
2,368,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
2,062
|
|
|
2,000
|
|
|
5,681
|
|
|
5,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total benefits and
expenses
|
|
|
818,954
|
|
|
791,606
|
|
|
2,418,814
|
|
|
2,373,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
taxes
|
|
|
19,856
|
|
|
(20,997)
|
|
|
115,730
|
|
|
(83,343)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
|
5,910
|
|
|
(3,430)
|
|
|
36,075
|
|
|
(30,944)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
|
13,946
|
|
|
(17,567)
|
|
|
79,655
|
|
|
(52,399)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to the non-controlling interest
|
|
|
(2)
|
|
|
-
|
|
|
(10)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Triple-S Management Corporation
|
$
|
13,948
|
|
$
|
(17,567)
|
|
$
|
79,665
|
|
$
|
(52,400)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Triple-S Management Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
|
$
|
0.59
|
|
$
|
(0.77)
|
|
$
|
3.44
|
|
$
|
(2.27)
|
|
Diluted net income
(loss) per share
|
|
$
|
0.58
|
|
$
|
(0.77)
|
|
$
|
3.43
|
|
$
|
(2.27)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average of
common shares
|
|
|
23,830,106
|
|
|
22,895,582
|
|
|
23,143,361
|
|
|
23,058,754
|
|
Diluted weighted
average of common shares
|
|
|
23,893,807
|
|
|
22,895,582
|
|
|
23,217,298
|
|
|
23,058,754
|
Exhibit III
Condensed
Consolidated Statements of Cash Flows
|
(dollar amounts in
thousands)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine
Months Ended
|
|
|
|
|
|
|
|
September
30,
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
$
|
(3,455)
|
|
$
|
(3,928)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Proceeds from
investments sold or matured:
|
|
|
|
|
|
|
|
|
Securities available
for sale:
|
|
|
|
|
|
|
|
|
Fixed maturities
sold
|
|
|
365,383
|
|
|
1,042,720
|
|
|
Fixed maturities
matured/called
|
|
|
19,017
|
|
|
18,133
|
|
|
Securities held to
maturity - fixed maturities matured/called
|
|
|
1,378
|
|
|
2,066
|
|
|
Equity investments
sold
|
|
|
126,134
|
|
|
150,024
|
|
|
Other invested assets
sold
|
|
|
3,379
|
|
|
2,040
|
|
Acquisition of
investments:
|
|
|
|
|
|
|
|
|
Securities available
for sale - fixed maturities
|
|
|
(397,956)
|
|
|
(1,113,587)
|
|
|
Securities held to
maturity - fixed maturities
|
|
|
(748)
|
|
|
(2,238)
|
|
|
Equity
investments
|
|
|
(88,945)
|
|
|
(113,108)
|
|
|
Other invested
assets
|
|
|
(24,233)
|
|
|
(38,501)
|
|
Increase in other
investments
|
|
|
(2,710)
|
|
|
(144)
|
|
Net change in policy
loans
|
|
|
(1,097)
|
|
|
(603)
|
|
Net capital
expenditures
|
|
|
(14,746)
|
|
|
(12,315)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
|
(15,144)
|
|
|
(65,513)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Change in outstanding
checks in excess of bank balances
|
|
|
3,808
|
|
|
9,104
|
|
Repayments of
long-term borrowings
|
|
|
(2,425)
|
|
|
(2,427)
|
|
Repurchase and
retirement of common stock
|
|
|
(1)
|
|
|
(22,390)
|
|
Proceeds from
policyholder deposits
|
|
|
15,060
|
|
|
14,726
|
|
Surrender of
policyholder deposits
|
|
|
(16,455)
|
|
|
(21,422)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
financing activities
|
|
|
(13)
|
|
|
(22,409)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
|
(18,612)
|
|
|
(91,850)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
|
117,544
|
|
|
198,941
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
|
$
|
98,932
|
|
$
|
107,091
|
Exhibit IV
Segment Performance Supplemental Information
(Unaudited)
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
(dollar amounts in
millions)
|
2019
|
2018
|
Percentage
Change
|
|
2019
|
2018
|
Percentage
Change
|
Premiums earned,
net:
|
|
|
|
|
|
|
|
|
Managed
Care:
|
|
|
|
|
|
|
|
|
|
Commercial
|
$
203.1
|
$
197.3
|
2.9%
|
|
$
602.4
|
$
590.8
|
2.0%
|
|
|
Medicare
|
367.1
|
283.6
|
29.4%
|
|
1,065.7
|
851.3
|
25.2%
|
|
|
Medicaid
|
176.3
|
199.8
|
(11.8%)
|
|
577.7
|
603.9
|
(4.3%)
|
|
|
|
Total Managed
Care
|
746.5
|
680.7
|
9.7%
|
|
2,245.8
|
2,046.0
|
9.8%
|
|
Life
Insurance
|
45.8
|
42.3
|
8.3%
|
|
135.1
|
125.1
|
8.0%
|
|
Property and
Casualty
|
23.7
|
20.2
|
17.3%
|
|
64.9
|
67.1
|
(3.3%)
|
|
Other
|
|
|
(1.0)
|
(0.8)
|
25.0%
|
|
(3.3)
|
(1.9)
|
73.7%
|
|
|
|
|
Consolidated premiums
earned, net
|
$
815.0
|
$
742.4
|
9.8%
|
|
$
2,442.5
|
$
2,236.3
|
9.2%
|
Operating revenues
(loss): 1
|
|
|
|
|
|
|
|
|
Managed
Care
|
$
755.8
|
$
692.4
|
9.2%
|
|
$
2,273.7
|
$
2,077.8
|
9.4%
|
|
Life
Insurance
|
52.5
|
48.7
|
7.8%
|
|
155.1
|
144.2
|
7.6%
|
|
Property and
Casualty
|
26.2
|
22.7
|
15.4%
|
|
72.3
|
74.8
|
(3.3%)
|
|
Other
|
|
|
1.4
|
0.2
|
600.0%
|
|
1.0
|
0.5
|
100.0%
|
|
|
|
|
Consolidated
operating revenues
|
$
835.9
|
$
764.0
|
9.4%
|
|
$
2,502.1
|
$
2,297.3
|
8.9%
|
Operating income
(loss): 2
|
|
|
|
|
|
|
|
|
Managed
Care
|
$
5.4
|
$
14.2
|
(62.0%)
|
|
$
56.8
|
$
26.3
|
116.0%
|
|
Life
Insurance
|
6.6
|
5.7
|
15.8%
|
|
17.5
|
14.6
|
19.9%
|
|
Property and
Casualty
|
6.6
|
(46.9)
|
114.1%
|
|
14.9
|
(114.8)
|
113.0%
|
|
Other
|
|
|
0.4
|
1.4
|
(71.4%)
|
|
(0.2)
|
2.7
|
(107.4%)
|
|
|
|
|
Consolidated
operating income (loss)
|
$
19.0
|
$
(25.6)
|
174.2%
|
|
$
89.0
|
$
(71.2)
|
225.0%
|
Operating margin:
3
|
|
|
|
|
|
|
|
|
Managed
Care
|
0.7%
|
2.1%
|
-140 bp
|
|
2.5%
|
1.3%
|
120 bp
|
|
Life
Insurance
|
12.6%
|
11.7%
|
90 bp
|
|
11.3%
|
10.1%
|
120 bp
|
|
Property and
Casualty
|
25.2%
|
(206.6%)
|
23,180 bp
|
|
20.6%
|
(153.5%)
|
17,410 bp
|
|
Consolidated
|
2.3%
|
(3.4%)
|
570 bp
|
|
3.6%
|
(3.1%)
|
670 bp
|
Depreciation and
amortization expense
|
$
3.7
|
$
3.0
|
23.3%
|
|
$
10.7
|
$
9.9
|
8.1%
|
|
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
September 30,
|
Nine months
ended
September 30,
|
(Unaudited)
|
|
2019
|
2018
|
2019
|
2018
|
Member months
enrollment:
|
|
|
Commercial:
|
|
|
|
Fully-insured
|
|
964,321
|
|
|
939,110
|
|
|
2,872,836
|
|
|
2,840,884
|
|
|
|
Self-insured
|
|
356,059
|
|
|
427,791
|
|
|
1,072,510
|
|
|
1,317,244
|
|
|
|
|
Total
Commercial
|
|
1,320,380
|
|
|
1,366,901
|
|
|
3,945,346
|
|
|
4,158,128
|
|
|
Medicare
Advantage
|
|
|
|
|
386,995
|
|
|
334,836
|
|
|
1,156,438
|
|
|
1,008,063
|
|
|
Medicaid
|
|
|
1,065,885
|
|
|
1,191,681
|
|
|
3,187,753
|
|
|
3,564,769
|
|
|
|
|
|
Total member
months
|
|
2,773,260
|
|
|
2,893,418
|
|
|
8,289,537
|
|
|
8,730,960
|
|
Claim liabilities
(in millions)
|
|
|
$
|
390.3
|
|
$
|
413.3
|
|
Days claim
payable
|
|
|
|
56
|
|
|
65
|
|
Premium
PMPM:
|
|
|
Managed
Care
|
$
|
308.83
|
|
$
|
276.08
|
|
$
|
311.18
|
|
$
|
275.97
|
|
|
|
Commercial
|
210.61
|
|
210.09
|
|
|
209.69
|
|
|
207.96
|
|
|
|
Medicare
Advantage
|
948.59
|
|
846.98
|
|
|
921.54
|
|
|
844.49
|
|
|
|
Medicaid
|
165.40
|
|
167.66
|
|
|
181.22
|
|
|
169.41
|
|
Medical loss
ratio:
|
|
86.4
|
%
|
|
83.2
|
%
|
|
84.9
|
%
|
|
84.7
|
%
|
|
Commercial
|
|
84.7
|
%
|
|
84.5
|
%
|
|
82.8
|
%
|
|
82.0
|
%
|
|
Medicare
Advantage
|
|
81.1
|
%
|
|
80.3
|
%
|
|
81.4
|
%
|
|
84.4
|
%
|
|
Medicaid
|
|
|
99.6
|
%
|
|
85.9
|
%
|
|
93.4
|
%
|
|
87.9
|
%
|
Adjusted medical loss
ratio: 1
|
|
|
86.5
|
%
|
|
82.8
|
%
|
|
85.8
|
%
|
|
83.9
|
%
|
|
Commercial
|
|
|
84.5
|
%
|
|
82.7
|
%
|
|
83.5
|
%
|
|
83.2
|
%
|
|
Medicare
Advantage
|
|
|
81.7
|
%
|
|
79.6
|
%
|
|
81.8
|
%
|
|
82.3
|
%
|
|
Medicaid
|
|
|
98.1
|
%
|
|
87.3
|
%
|
|
95.7
|
%
|
|
86.9
|
%
|
Operating expense
ratio:
|
|
|
Consolidated
|
|
16.7
|
%
|
|
18.9
|
%
|
|
16.5
|
%
|
|
18.2
|
%
|
|
Managed
Care
|
|
14.0
|
%
|
|
16.3
|
%
|
|
13.8
|
%
|
|
15.4
|
%
|
|
1 The
adjusted medical loss ratio accounts for subsequent adjustments to
estimates, such as prior-period reserve developments and Medicare
premium adjustments, and presents them in their corresponding
period.
|
Managed Care
Membership by Segment
|
As of September
30,
|
|
|
|
|
|
|
2019
|
2018
|
Members:
|
|
|
|
|
|
Commercial:
|
|
|
|
Fully-insured
|
322,992
|
313,729
|
|
Self-insured
|
119,077
|
140,094
|
|
Total
Commercial
|
442,069
|
453,823
|
|
Medicare
Advantage
|
|
|
|
|
128,660
|
111,389
|
|
Medicaid
|
|
354,230
|
394,149
|
|
Total
members
|
924,959
|
959,361
|
Exhibit V
Reconciliation of Non-GAAP Financial Measures
|
|
|
|
|
|
Adjusted Net
Income (Loss)
|
(Unaudited)
|
Three months
ended
September 30,
|
Nine months
ended
September 30,
|
(dollar amounts in
millions)
|
2019
|
2018
|
|
2019
|
2018
|
Net income
(loss)
|
$
|
13.9
|
$
|
(17.6)
|
|
$
|
79.7
|
$
|
(52.4)
|
Less
adjustments:
|
|
|
|
|
|
|
Net realized
investment gains (losses), net of tax
|
0.9
|
(0.8)
|
|
3.8
|
0.8
|
|
Unrealized gains
(losses) on equity investments
|
1.0
|
4.5
|
|
19.4
|
(9.1)
|
|
Private equity
investment income (loss), net of tax
|
(0.1)
|
0.9
|
|
1.0
|
1.3
|
|
|
Adjusted net income
(loss)
|
$
|
12.1
|
$
|
(22.2)
|
|
$
|
55.6
|
$
|
(45.4)
|
|
|
Diluted adjusted net
income (loss) per share
|
$
|
0.51
|
$
|
(0.97)
|
|
$
|
2.39
|
$
|
(1.96)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income (Loss) and Operating Income
(Loss) Excluding Property and Casualty
Unfavorable Development
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
Three months
ended
September 30,
|
Nine months
ended
September 30,
|
(dollar amounts in
millions)
|
2019
|
2018
|
|
2019
|
2018
|
Adjusted net income
(loss)
|
$
|
12.1
|
$
|
(22.2)
|
|
$
|
55.6
|
$
|
(45.4)
|
Less unfavorable
prior period reserve development, net of tax
|
-
|
35.9
|
|
-
|
85.4
|
|
|
Adjusted net income
excluding P&C unfavorable
|
|
|
|
|
|
|
|
|
prior period reserve
development
|
$
|
12.1
|
$
|
13.7
|
|
$
|
55.6
|
$
|
40.0
|
|
|
Diluted adjusted net
income per share excluding
|
|
|
|
|
|
|
|
|
P&C unfavorable
prior period reserve development
|
$
|
0.51
|
$
|
0.60
|
|
$
|
2.39
|
$
|
1.73
|
Operating income
(loss)
|
$
|
19.0
|
$
|
(25.6)
|
|
$
|
89.0
|
$
|
(71.2)
|
Less unfavorable
prior period reserve development
|
-
|
52.3
|
|
-
|
128.7
|
|
|
Operating income
excluding P&C unfavorable
|
|
|
|
|
|
|
|
|
prior period reserve
development
|
$
|
19.0
|
$
|
26.7
|
|
$
|
89.0
|
$
|
57.5
|
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 does 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
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/triple-s-management-corporation-reports-third-quarter-2019-results-300953651.html
SOURCE Triple-S Management Corporation