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Anthem raises earnings forecast after lower medical costs drive profit beat

FILE PHOTO: The office building of health insurer Anthem is seen in Los Angeles, California

(Reuters) -Health insurer Anthem Inc raised its forecast for full-year adjusted earnings on Wednesday, as lower-than-expected medical costs due to the waning impact of the pandemic helped it beat Wall Street estimates for quarterly profit.

The company's upbeat forecast follows that of industry bellwether UnitedHealth Group Inc, which said although demand for deferred procedures was approaching normal levels it had still not increased as feared, leading to lower claims and costs.

In the first quarter, Anthem's benefit expense ratio - an insurer's spending on claims against the premiums it earns - was 86.1%, compared with expectations of 87.8%, according to five analysts polled by Refinitiv.

The company now expects adjusted net income of over $28.40 per share, compared with its prior forecast of more than $28.25 per share.

Excluding items, Anthem earned $8.25 per share, surging past Refinitiv IBES estimates of $7.81 per share.

Net income attributable to shareholders rose to $1.81 billion, or $7.39 per share, in the first quarter ended March 31 from $1.67 billion, or $6.71 per share, a year earlier.

(Reporting by Manas Mishra in Bengaluru; Editing by Anil D'Silva)