- While UnitedHealth Group stands alone as its competitors match up in a mega-merger frenzy, the company is actually poised to benefit from those deals, suggests Moody's Investors Service.
- If the deals go through between Anthem and Cigna, and Aetna and Humana, Anthem will rise as the largest insurer while Aetna will rise as the largest Medicare Advantage insurer, the report noted.
- However, UnitedHealth will still be expected to see higher revenues, earnings, cash flow and lower debt obligations than its competitors, Moody's says.
UnitedHealth is predicted to remain on top thanks to its diverse lines of business. These include health services company Optum, which recently reported third-quarter revenue growth of 27%, noted FierceHealthPayer, adding UnitedHealth is also reported to be seeking a deal with employee benefit management company Helios.
"This broad range of activity will continue to provide UNH not only strategic advantages, but also additional earnings and cash flow diversity and financial flexibility," Moody's report stated.
Mody's analysts suggest UnitedHealth will not only remain on top, but could benefit from the mergers of its competitors by buying their potential divestitures and taking advantage of the "distractions and service issues that are typical of large health insurer integrations."