Market Overview

Humana Announces Completion of the Sale of Its Closed Block of Commercial Long-Term Care Insurance Business

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Humana Inc. (NYSE:HUM) announced today that it has completed the
previously announced sale of the stock of its wholly-owned subsidiary,
KMG America Corporation (KMG), to Continental General Insurance Company
(CGIC), a Texas-based insurance company wholly owned by HC2 Holdings,
Inc., a diversified holding company (NYSE:HCHC). KMG's subsidiary,
Kanawha Insurance Company (KIC), includes Humana's closed block of
non-strategic commercial long-term care insurance policies that serves
approximately 29,300 policyholders.

Goldman Sachs & Co. LLC acted as financial advisor to Humana. Locke Lord
LLP acted as legal advisor to Humana.

Cautionary Statement

This news release includes forward-looking statements regarding Humana
within the meaning of the Private Securities Litigation Reform Act of
1995. When used in investor presentations, press releases, Securities
and Exchange Commission (SEC) filings, and in oral statements made by or
with the approval of one of Humana's executive officers, the words or
phrases like "expects," "believes," "anticipates," "intends," "likely
will result," "estimates," "projects" or variations of such words and
similar expressions are intended to identify such forward-looking
statements.

These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties, and assumptions,
including, among other things, information set forth in the "Risk
Factors" section of the company's SEC filings, a summary of which
includes but is not limited to the following:

  • If Humana does not design and price its products properly and
    competitively, if the premiums Humana receives are insufficient to
    cover the cost of healthcare services delivered to its members, if the
    company is unable to implement clinical initiatives to provide a
    better healthcare experience for its members, lower costs and
    appropriately document the risk profile of its members, or if its
    estimates of benefits expense are inadequate, Humana's profitability
    could be materially adversely affected. Humana estimates the costs of
    its benefit expense payments, and designs and prices its products
    accordingly, using actuarial methods and assumptions based upon, among
    other relevant factors, claim payment patterns, medical cost
    inflation, and historical developments such as claim inventory levels
    and claim receipt patterns. The company continually reviews estimates
    of future payments relating to benefit expenses for services incurred
    in the current and prior periods and makes necessary adjustments to
    its reserves, including premium deficiency reserves, where
    appropriate. These estimates, however, involve extensive judgment, and
    have considerable inherent variability because they are extremely
    sensitive to changes in claim payment patterns and medical cost
    trends, so any reserves the company may establish, including premium
    deficiency reserves, may be insufficient.
  • If Humana fails to effectively implement its operational and strategic
    initiatives, particularly its Medicare initiatives and state-based
    contract strategy, the company's business may be materially adversely
    affected, which is of particular importance given the concentration of
    the company's revenues in these products. In addition, there can be no
    assurances that the company will be successful in maintaining or
    improving its Star ratings in future years.
  • If Humana fails to properly maintain the integrity of its data, to
    strategically implement new information systems, to protect Humana's
    proprietary rights to its systems, or to defend against cyber-security
    attacks, the company's business may be materially adversely affected.
  • Humana is involved in various legal actions, or disputes that could
    lead to legal actions (such as, among other things, provider contract
    disputes relating to rate adjustments resulting from the Balanced
    Budget and Emergency Deficit Control Act of 1985, as amended, commonly
    referred to as "sequestration"; other provider contract disputes; and
    qui tam litigation brought by individuals on behalf of the
    government), governmental and internal investigations, and routine
    internal review of business processes any of which, if resolved
    unfavorably to the company, could result in substantial monetary
    damages or changes in its business practices. Increased litigation and
    negative publicity could also increase the company's cost of doing
    business.
  • As a government contractor, Humana is exposed to risks that may
    materially adversely affect its business or its willingness or ability
    to participate in government healthcare programs including, among
    other things, loss of material government contracts, governmental
    audits and investigations, potential inadequacy of government
    determined payment rates, potential restrictions on profitability,
    including by comparison of profitability of the company's Medicare
    Advantage business to non-Medicare Advantage business, or other
    changes in the governmental programs in which Humana participates.
  • The Healthcare Reform Law, including The Patient Protection and
    Affordable Care Act and The Healthcare and Education Reconciliation
    Act of 2010, could have a material adverse effect on Humana's results
    of operations, including restricting revenue, enrollment and premium
    growth in certain products and market segments, restricting the
    company's ability to expand into new markets, increasing the company's
    medical and operating costs by, among other things, requiring a
    minimum benefit ratio on insured products, lowering the company's
    Medicare payment rates and increasing the company's expenses
    associated with a non-deductible health insurance industry fee and
    other assessments; the company's financial position, including the
    company's ability to maintain the value of its goodwill; and the
    company's cash flows. Additionally, potential legislative changes,
    including activities to repeal or replace, in whole or in part, the
    Health Care Reform Law, creates uncertainty for Humana's business, and
    when, or in what form, such legislative changes may occur cannot be
    predicted with certainty.
  • Humana's business activities are subject to substantial government
    regulation. New laws or regulations, or changes in existing laws or
    regulations or their manner of application could increase the
    company's cost of doing business and may adversely affect the
    company's business, profitability and cash flows.
  • If Humana fails to develop and maintain satisfactory relationships
    with the providers of care to its members, the company's business may
    be adversely affected.
  • Humana's pharmacy business is highly competitive and subjects it to
    regulations in addition to those the company faces with its core
    health benefits businesses.
  • Changes in the prescription drug industry pricing benchmarks may
    adversely affect Humana's financial performance.
  • If Humana does not continue to earn and retain purchase discounts and
    volume rebates from pharmaceutical manufacturers at current levels,
    Humana's gross margins may decline.
  • Humana's ability to obtain funds from certain of its licensed
    subsidiaries is restricted by state insurance regulations.
  • Downgrades in Humana's debt ratings, should they occur, may adversely
    affect its business, results of operations, and financial condition.
  • The securities and credit markets may experience volatility and
    disruption, which may adversely affect Humana's business.

In making forward-looking statements, Humana is not undertaking to
address or update them in future filings or communications regarding its
business or results. In light of these risks, uncertainties, and
assumptions, the forward-looking events discussed herein may or may not
occur. There also may be other risks that the company is unable to
predict at this time. Any of these risks and uncertainties may cause
actual results to differ materially from the results discussed in the
forward-looking statements.

Humana advises investors to read the following documents as filed by the
company with the SEC for further discussion both of the risks it faces
and its historical performance:

  • Form 10-K for the year ended December 31, 2017;
  • Form 10-Q for the quarters ended March 31, 2018 and June 30, 2018; and
  • Form 8-Ks filed during 2018

About HC2 Holdings, Inc.

HC2 Holdings, Inc. is a publicly traded (NYSE:HCHC) diversified holding
company, which seeks opportunities to acquire and grow businesses that
can generate long-term sustainable free cash flow and attractive returns
in order to maximize value for all stakeholders. HC2 has a diverse array
of operating subsidiaries across eight reportable segments, including
Construction, Marine Services, Energy, Telecommunications, Life
Sciences, Broadcasting, Insurance and Other. HC2's largest operating
subsidiaries include DBM Global Inc., a family of companies providing
fully integrated structural and steel construction services, and Global
Marine Systems Limited, a leading provider of engineering and underwater
services on submarine cables. Founded in 1994, HC2 is headquartered in
New York, New York. Learn more about HC2 and its portfolio companies at www.hc2.com.
For information on HC2 Holdings, Inc., please contact Andrew G. Backman
- Managing Director - Investor Relations & Public Relations - abackman@hc2.com
- 212-339-5836.

About Humana

Humana Inc. is committed to helping our millions of medical and
specialty members achieve their best health. Our successful history in
care delivery and health plan administration is helping us create a new
kind of integrated care with the power to improve health and well-being
and lower costs. Our efforts are leading to a better quality of life for
people with Medicare, families, individuals, military service personnel,
and communities at large.

To accomplish that, we support physicians and other health care
professionals as they work to deliver the right care in the right place
for their patients, our members. Our range of clinical capabilities,
resources and tools – such as in-home care, behavioral health, pharmacy
services, data analytics and wellness solutions – combine to produce a
simplified experience that makes health care easier to navigate and more
effective.

More information regarding Humana is available to investors via the
Investor Relations page of the company's website at humana.com,
including copies of:

  • Annual reports to stockholders;
  • Securities and Exchange Commission filings;
  • Most recent investor conference presentations;
  • Quarterly earnings news releases and conference calls;
  • Calendar of events; and
  • Corporate Governance information.

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