Health insurers slide after Elevance cuts annual profit forecast on higher medical costs

Shares of health insurers fall after Elevance ELV.N cut its annual profit forecast due to higher medical costs

ELV cuts annual profit forecast to about $30 per share, compared with a previous projection of $34.15 to $34.85 per share, analysts on average were expecting $34.23, according to data compiled by LSEG

For the second quarter, Elevance reported a medical loss ratio, the percentage of premiums spent on medical care, of 88.9% compared to analysts' estimates of 88.70%.

Shares of major health insurers decline: Centene CNC.N down 2.3%, Molina Healthcare MOH.N down 5.1%, CVS CVS.N down ~1%, and Cigna CI.N down 2.2%

Centene withdrew its annual profit forecast while Molina Healthcare lowered its full-year profit projection earlier, as both companies grappled with rising medical costs

Their actions underscore persistent industry-wide challenges in managing surging expenses for government-backed health plans over past two years

Leerink Partners analyst Whit Mayo says updated forecast for profit and medical loss ratio provides "a better reset" for Elevance, but remains cautious due to overall challenging environment for the sector

Including session's move, shares of CNC, MOH fall 51.2%, 28.4%, while CVS and CI up 41.15% and 8.7% YTD