...Criteria Application for Sector: This report addresses how Fitch Ratings applies its global Insurance Rating Methodology (IRM) when analyzing companies in the U.S. health insurance and managed care sector. The report focuses on application of the key credit factors as outlined in Section I. of the IRM. This report does not introduce new criteria. Rather, it interprets how master criteria are applied to reflect sector-specific attributes. Sectors' Key Characteristics: The U.S. health insurance sector is mature and highly competitive. Entry barriers are high due to the need to develop provider care networks and scale. Competition is based heavily on price as product differentiation is difficult to develop and maintain. Pricing power is limited by intense competition and the government's role in the Medicare and Medicaid markets. Earnings are generally stable due to health insurers' ability to price products effectively and manage healthcare delivery costs. Potential/Probable Rating Ranges:...
