- New York City-based Assurant Health announced Wednesday that it will wind down its business in the next 18 months. The company said in April that it would close its doors if it did not find a buyer.
- Some assets will be sold: Assurant will sell its small-group business lines to National General Holdings Corp., but the individual-health lines based in Milwaukee will be shuttered.
- The company will stop sales of individual major medical, small group fully insured and short-term medical policies on June 15.
No surprises here—Assurant was a tough sell, with Q1 losses "significantly worse than we anticipated," according to Assurant Chief Financial Officer Christopher Pagano. The company lost almost $150 million in the past 15 months. Add that to the fact that Assurant is not big enough in any given market to negotiate directly with providers (instead paying a monthly fee to other insurers for network access), and it makes sense the company had to give up on moving its individual business. A buyer would have had to raise premiums dramatically to offset the losses that came with the purchase, and with many consumers shopping based on price, it's unlikely such a plan would have attracted customers.
Steven Schwartz, an analyst with Raymond James & Associates, called Assurant Health a "casualty of the ACA." Coverage for small employers and individuals are the two markets that have been forced to adapt perhaps the most drastically under the ACA. When the legislation handicapped the company's underwriting capabilities—it "went away" Schwartz said—Assurant lost one of its best market advantages.