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UnitedHealth's financial power is growing. Photo: UnitedHealth Group
UnitedHealth Group registered more than $6.6 billion in profits in the second quarter — by far the conglomerate's highest quarterly profit ever, according to an analysis of company financial data from FactSet.
Why it matters: Most companies struggled in the second quarter as the coronavirus pandemic froze the economy, but health insurers like UnitedHealth heavily benefited as people held off on going to the doctor or hospital, resulting in fewer medical claims that needed to be paid.
The big picture: The jump in profits exceeded Wall Street's predictions and was heavily driven by UnitedHealth's insurance division.
- The operating margin in the second quarter for UnitedHealthcare was 14.3% vs. 6.8% for Optum, which is the division of the company that runs doctors' practices, technology, consulting and pharmacy benefits.
Zoom in: UnitedHealth's "medical loss ratio" in the quarter was 70.2% compared with 83.1% during the same time last year — meaning UnitedHealth paid out just 70 cents in medical claims for every dollar it received in premiums.
Yes, but: The company expects that ratio will rise later this year as more people get the care they delayed. UnitedHealth also said some of its commercial employers cut coverage for workers due to the pandemic, which affected its revenue.
Go deeper: UnitedHealth's political and financial heft just keeps growing