WellPoint Inc., the second-biggest U.S. health insurer, said it is lowering its profit forecast for the year by 3 percent after reaching a $90 million legal settlement.
Indianapolis-based WellPoint expects to earn at least $7.57 per share for 2012 compared with its June 4 estimate of $7.80, the insurer said Friday in a regulatory filing. While the forecast includes first-quarter net investment gains of 19 cents a share, the company hasn’t estimated the investment earnings for the rest of the year.
WellPoint is the biggest seller of health plans to individuals, a market set to grow by as much as 22 million people under the 2010 U.S. health-care law. Analysts estimated the company would earn $7.71 a share, excluding some items, according to the average of 18 estimates compiled by Bloomberg.
If approved by U.S. District Judge Tanya Walton Pratt, the $90 million settlement will resolve a class-action lawsuit brought on behalf of more than 700,000 former members of Anthem Insurance Cos. Inc., lawyers for the plaintiffs said Friday afternoon.
The lawsuit, which was set for a June 18 trial in federal court in Indianapolis, arose from Anthem’s 2001 conversion from a mutual company, owned by its insured policyholders, to a public company. WellPoint is the corporate parent of Anthem.
Anthem members received nearly $2.1 billion in cash compensation as part of the conversion process to a public company, but their complaint alleged that was not the fair value of their interests.
Other policyholders elected to receive stock in the conversion, and they sued WellPoint in a separate lawsuit. Pratt dismissed that case in December, in favor of WellPoint.