ANNAPOLIS – With all the financial success WellPoint Health Networks has had in the past decade, the company has earned itself a nickname.
“They’re called Wall Street’s darling,” said Isabelle Roman-Barrio, senior financial analyst at A.M. Best, which rates health insurers from a financial standpoint.
Ranked as the best large health insurance company by Forbes magazine for 2001, an honor proudly displayed on the company’s Web site, and as Fortune magazine’s most admired health care company four years running, WellPoint has been highly regarded throughout the health-care industry, she said.
Its growth and consistent meeting of profit expectations is what has earned it the financial industry’s admiration, she said. Valued at about $28 a share during its initial public stock offering in 1993, its shares were trading at $120.59 at the close of trading Friday.
With the recent acquisitions of Missouri and Georgia’s Blue Cross Blue Shield plans, the company now has 16,300 employees and more than 80 offices.
“Their acquisition plan is to target financially strong companies, not the fixer-upper types,” Roman-Barrio said.
That’s probably why they have their eyes set on Maryland’s CareFirst BlueCross BlueShield plan, she said.
WellPoint has offered $1.3 billion for CareFirst. CareFirst would first have to win approval to convert from its nonprofit status before the sale can take place.
CareFirst’s strong market share along with the state’s high density is probably what makes it so appealing, Roman-Barrio said.
For Georgia, WellPoint’s purchase of that state’s Blue Cross plan in March 2001 has been positive, according to the insurance commissioner’s office.
“In summary, to date, WellPoint appears to have done what they told us they would do in their filings,” the office said in a statement. “They continue to be a large, well-run health care company in our opinion.”
But WellPoint’s growth has not been limited to its acquisitions. The number of its enrollees in California has continued to rise.
Brad Holmes, senior analyst at the technology analysis firm Forrester Research, is not surprised.
Much of the company’s success has come from tailoring its plans to different market needs, Holmes said.
“It’s respected in building what the people want to buy,” he said. “You don’t get there unless people are buying the product. The proof is in the pudding.”
Today, combined with all of its subsidiaries, WellPoint insures about 13.1 million members and is worth about $7.8 billion.
Even though the company hasn’t stopped growing, Roman-Barrio doesn’t predict its success will end anytime soon: “They’re able to move with the economy.”