Last week Coventry released their Q1 2011 earnings report, and things are looking good.
First, the workers comp results. Revenues were up slightly, to $191.6 million, a 4% increase over the prior year’s quarter. For the last few months, Coventry’s new CFO Randy Giles has been immersed in the business prior to assuming his new role. Given the inordinate profitability of the comp sector, it’s not surprising Giles was focused on WC; the company is relying on the cash from WC to fund it’s investment in other areas as it prepares for the brave new world of post-reform healthcare in 2014.
Overall, the Louisiana suit is still dragging on Coventry, as it placed “$150.5 million into escrow to fund a preliminary settlement of the Louisiana provider class action charge as disclosed in the Q4 2010.” Note that this is a preliminary settlement reserve; there may – or may not – be an additional allocation when the final settlement is determined. And there’s also the possibility the suit will be overturned at some point.
While Coventry doesn’t report earnings for work comp, word is it remains extraordinarily profitable, driven in part by price increases pushed thru for network business over the last eighteen months or so.
Next week – after NCCI – we’ll look at Coventry’s other results.
May
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