: Humana’s stock up 1.6% premarket after health insurer says claims activity is stabilizing after June spike

Humana Inc.’s stock HUM rose 2.6% in premarket trade Wednesday, after the health insurance company topped earnings estimates for the second quarter and said the Medicare Advantage utilization environment was improving based on recent claims activity. Louisville, Ky.-based Humana had per-share earnings of $7.66 for the quarter, up from $5.48 a year ago. Adjusted per-share earnings came to $8.94, ahead of the $8.76 FactSet consensus. Revenue rose to $26.747 billion from $23.662 billion a year ago, also ahead of the $25.825 billion FactSet consensus. The company said its benefits expense ratio rose to 86.3% from 85.8% a year ago, but was within the previously provided guidance range of 86.3% to 87.3% for 2023. For insurers, a higher expense ratio means higher costs to provide insurance. Humana and rivals saw their stocks smacked in June amid reports of pent-up demand from senior citizens for hip and knee surgeries that were delayed by the COVID-19 pandemic were boosting costs, sparking a steep selloff in the sector. Humana said it now expects full-year adjusted EPS of at least $28.25, which compares with a FactSet consensus of $28.29. The stock has fallen 11% in the year to date, while the S&P 500 SPX has gained 19%.

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