Investors whacked WellPoint Inc. stock this morning after the Indianapolis-based health insurer tamped down expectations for customer growth.
WellPoint said in its second-quarter earnings report that it lost 108,000 customers in the three months ended June 30 and now expects to add 400,000 fewer customers than it predicted in April.
Its shares dropped more than 3 percent, to $78.90.
WellPoint has 34.8 million customers now-more than any other health insurance firm in the country-and expects to reach 35.1 million by year's end.
But it lost customers because big employers in the auto, home building and mortgage industries cut jobs. Also, WellPoint lost individual customers due to price increases, and saw some slippage in its health plans not under the Blue Cross or Blue Shield brand.
WellPoint operates so-called Blues plans in 14 states.
Slower customer growth isn't hurting WellPoint earnings. Profit rose 11 percent in the quarter, to $835.2 million, meeting analysts' expectations of $1.35 per share. The company also raised its full-year profit forecast by a penny, to $5.55 per share.
WellPoint posted revenue of $15 billion, up 7.5 percent over the prior year. In the last 12 months, WellPoint added 604,000 customers.
In a conference call this morning, analysts questioned WellPoint officers about the company's benefit expense ratio, which compares the dollars it pays out in claims to the dollars it collects in premiums.
WellPoint's benefit expense ratio rose to 81.8 percent in its second quarter from 81.2 percent a year ago. But the second-quarter ratio was down from the 83.1 percent ratio WellPoint posted in its first quarter this year.
WellPoint Chief Financial Officer Wayne DeVeydt said he expects the ratio to run about 81.3 percent for the rest of the year.