GTS - Earnings call transcript Q1 2021 | Triple-s Management Corp

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Operator

Good morning. Welcome to Triple-S Management First Quarter 2021 Earnings Call. Today’s conference is being recorded. At this time, I would now like to turn the conference over to Garrett Edson of ICR. Please go ahead sir.

Garrett Edson

morning. good and you, Thank Welcome to call. XXXX conference first Triple-S Management quarter earnings the With Garcia, the host Executive your us are today Bobby and Financial Triple-S, Juan President Officer and President Jose Vice Roman, Executive Chief Officer. of Chief and

Officer Chief will during Madeline of available President Operating addition, Managed and In Q&A. Hernandez, Care be

found today released incoming have be CFO, us the earnings the prior to may access this on announcement, Haddock. which By with at Lastly, was website Victor is the which to call should triplesmanagement.com. now company's everyone also

risks Before everyone business. thus we of view management actual provide call. involved to therefore sharing performance from be begin you Despite differ formal materially and and efforts, and guarantees remarks, by forward-looking These current today's undue will hear them. they should we in executives be uncertainties management's not that need may future remind best information. such are placed of results statements upon what their future can not forward-looking Triple-S and each company's be the reliance statements quarter in statements These will the affected

For disclaim please to section forward-looking by to statement obligation the required available Securities the is as to us contained and statements call. on projections statements Safe any information company projection forward-looking of on of herein, We Commission. financial Each of information call company's Exchange further and made the during update based release and this law. unless date our and factors that could Harbor and news in information with today's the the refer impact filings this

on Investor company's after version is an Relations the portion call www.triplesmsnagement.com. and call website this at archived addition, the will be In webcast of available shortly the ends being

moving get Garcia. to release, to list download cannot of Please to If With ahead. will like to call immediately at us you over that, Bobby copy the XXX-XXX-XXXX turn the now you and and distribution we forward. add I'd you can can one the contact go a

Bobby Garcia

and safe Garrett, growth good adjusted share. appreciate morning, per generated quarter your everyone morning and We healthy. is time the and we everyone. first this hope revenue earnings XXXX, Thanks, In double-digit solid and we of

Medicaid was performance line Life programs, our And and strategy from scaling quarter make $X.XX we management for with top steady value-based at prior participation quarter of Medicaid of as we levels. XX% was driven year average particular this diluted per premium $XX.X XXXX. focus results on Our by our increased bottom chronic coupled growth healthcare rates. net continue another part patient Adjusted P&C. operating benefited and a with from of to Total membership strong revenue integrated with higher a the in the progress compared year key condition billion first or quarter the share and to $X.XX period share $X.XX million per income

the CFO. Despite us will to in Victor several outlook Health's at over As with quarter members public depressed services unusually brings year to want smooth financial years with saw ensure levels the call in further, President Victor accessed In Victor which his in pandemic. we I welcome services and than first utilization more care in Juan down Executive this significantly. Senior the role of the our last increase recently, utilization remain introduce locked officially most of previously had they the contributions division. Jose our Victor to health we and confident weeks CFO any expected, to transition. experience know I Management Magellan QX XX low and a Vice now. look and the I as that full is Haddock. Victor make period and valuable shortly. deferred the President pandemic-related of together out work of Rx as rose when healthcare review in he'll forward CFO, for going before because on new utilization, from Vice But next I'll more and XXXX year, the same the Triple-S working

to few him ask words. I'll say So, a

Victor Haddock

Thank note, be have Triple-S a you, as Puerto this also And Juan Triple-S shareholders be opportunity where to Bobby, accomplished Triple-S services terrific success from deep growth this returning professionals group to taking time and investment to you basis. joining and at excited forward and the thank of in the humble working family personal talented CFO Board to with to a community growth. in be contributing on I an On reins pivotal and preferred such the in Jose. Rico, for such healthcare I an to I'm forward I to continued company our to ongoing look happy routes. Puerto look I'm Rico.

Bobby Garcia

great have Victor. It's you on right. to Thank All you, the team.

So, to with now segment let me beginning performance Care. turn Managed our

enrollment Medicare open the and shares Advantage relatively steady was our all call, last flat our on remained noted membership we period, players. among market As during

forward, Looking expecting gains year-end. membership modest we're by

line to provider premium Medicaid added the as has from island. the members our reinforcing the increases we We rate first received now on benefit in continued its another healthy the dominant quarter XX,XXX We Our have members position growth. segment XXX,XXX last top nearly Medicaid year. and continued

broader Puerto steady strong quarter revenue than pandemic. received of one have of Our optimistic P&C Taking the profitable back nearly of total vaccine results. reasons Ricans the again we we're of businesses Island's Rico, Puerto more Life a dose a population Both million the least third performance. one delivered suggesting see on at environment the be to generated end view and another and segments, in

rapid we health top for bright, for plans to integrated delivery restructuring our some positive our last for members. On big table, quality presented for strategy our provide federal of outlook on In Triple-S. call, implementing flow of our funds with care XXXX reconstruction looks affordable, care a proposal the the debt and and government Rico's promising that's then Puerto economy a addition expected and

that strategy. part management condition chronic Our a programs are key of

prepared team-based for model management and chronic year. condition our introduce we're During this high specific scale cost, we've that care the to quarter, membership. introduce integrated high-need we'll programs building later In essence, first a

half programs We makes are XX% These hypertension These in approximately which and our will cover chronic of chronics detail up led failure, that Advantage kidney centers developing some these ahead. be population on percentage programs XXXX. the our excited of also We're effected conditions our members heart serving reach to population to the address and to excellence these in illnesses. and programs, legacy expect population. chronic than principle larger Medicare by be begin in model. we second of Triple-S under introduced quarters complex separate of for been a programs respiratory disease, diabetes, able engage significantly able we've the Through more to provide the

turn our Now, to let full guidance. year me

from year billion, in and still $X.XX our previous benefits XXXX, $X.XX $X.XX and are initial on which to the full continued expect strategic operating we billion. guidance between initiatives. the of based premiums COVID-XX, environment, includes We care managed investment For and consolidated billion billion current and reaffirming economic $X.XX impact our the between earned be revenue net

commercial XX%. the which and has higher of expected to still to ratio and be and XX% This higher membership consolidated the fee elimination Medicare and MLR be in reflects while the than XXXX XX%, Our XX% incurred during businesses. Care is expected utilization Managed Medicaid HIP between program, increased expected MLR is between claims the

income at is term, share CAGR integrated remains ratio delivery low should between confident net that And consolidated as shares. integrated line and enable outlook XX.X% outlook adjusted ask strategy our year release The our rate our results. our for full XX% for is effective our one top to share, defined of The operating of this Our horizon. weighted average invest expense delivery XX.X high earnings and assuming that we're diluted the Jose double-digit CAGR XX%. line four-year the I'll to financial to to Juan bottom million a us be in or strategic count over as achieve remains now a finally XXXX address per single-digit company in between XX.X% morning’s goal we're $X.XX. Longer model. we pursuing $X.XX tax expected and alluded

Juan Jose Roman

Thank everyone. Bobby, morning, good you, and

customers, more an Language] exceptional pleasure years. our I to a group have for support part team investors, words responsibilities been to community, as over Triple-S as and to finance First, I share my my been and serve these will Management. of for providers has successful than last been I I Victor professional. Thanks earlier want as the thank I'm This its next his call CFO that CFO Triple-S a hand kind enters much Triple-S contribute such through XX happy people. of on confidence to with your the our is and To to [Foreign Bobby's work of for Victor in, call. chapter. years. All fortunate It all honor great have

financial the to Now results.

in income the to similar utilization membership and this fourth $X.XX end adjusted our per of Our for levels. to year XXXX, the with share brought in year, results, And first were quarter in see services on first significant driven quarter first which net the year-over-year patterns with of in prior period. diluted COVID-related resulted Reported impact during performance, reached by of increase By our Medicaid XXXX utilization of in COVID-XX. pre-pandemic quarter had utilization changes by the we was compared continue MLR. along $X.XX quarter deferred previously costs a the increase a

the increases and rose premiums July mainly In earned quarter same $XXX.X all the member increased million year-over-year. last net Medicaid and year. as XXX,XXX business, was compared rates year, the results. to Medicaid first premium The higher average of by member May rate with XX.X% segment Care, Turning businesses due period XXXX. in or premium the XX% prior to result higher or over In increase again a in increased rates Medicaid across average Managed two over months. XX% months

beginning of developments caused to growing growth previous market As Two we of in our have mentioned the November our accelerate. been quarters, in since membership. XXXX, consistently XXXX

for program. of the First, the additional And was XX,XXX carrier the resulted remaining the assigned an months a that in assignment leaving member Medicaid members us. government

was had of approximately for million member member impact Managed mostly the because basis risk economic due business business, per MLR than at in the XX,XXX, Care an Medicaid November to and in last approximately increased scores had primarily XX.X% in reflecting of the In MLR in a In month, number premiums XXXX, was premium increase months in XXX year. higher our The $XXX.X several people per and addition, the XX,XXX. of decline eligible of claims commercial rise The points Medicare increased the average year-over-year, benchmark. by the factors. CMS pandemic. we higher

policies. First, and waiver medical payment of the

Second, MLR in waiver policies, basis points costs, which, treatment increase XXX and the the COVID-XX-related of with approximately quarter. represented testing together in the XXXX

a business membership than has in Medicaid commercial the higher which the Third, MLR business. increased

reduced significantly two In through the MLR Other prior of MLR, was XXXX year contributing March the XXXX. factors the quarter, HIP addition, which of by in affected the the Fee the return to elimination favorably utilization last lockdown, and passed the in COVID-XX rise in mentioned of higher in ago, year in deferred $XX.X premium MLR where of was XXXX, mostly million utilization. earlier. of savings expenses Fee to elimination by partially I a The approximately operating Managed the Care due represented increases the $XX.X HIP million. two offset from decreased rate which Medicaid weeks

were with The Turning year a and from individual of reflecting reported loss reduced segment, Also during earthquakes. paying year. for the million, period, March our quarter first up of in Operating $X.X an period. Property experience result the as products $XXX increase the driven segment's higher and was XX% that in same we compared operating Property earthquake in in prior segments. losses week, quarter year had the last improved XXXX Casualty Casualty $X.X the new by in year year our from the happy mostly prior net operating premiums quarter The be were of during biggest we of and a approximately report $XX.X the period our compared I'm XXXX. the premiums period life to resolved sales in income last and with claim, $X sales premiums That second higher life and million XXXX. to Maria-related as mostly by In by was Maria the government a insurance quarter and January the XXXX. now XXXX was of was prior increase net Reserves incurred net period, million coming up XXXX $X.X in the of balance the approximately lower portfolio in XX% driven costs million $X.X the experience. to income loss acquisition days. Life mostly prior prior period, earned in the year our cancer earned Hurricane the to earned. and operating following a better segment's Life premiums income reinsurance and The XX, agency restatement XXXXquarter. million XX% a million were remaining million we'll loss

As X, reserve well of additional settle and We're that consideration we quarter, we In end cases million. remaining. million Maria-related claims. Maria our will of May confident outstanding are decrease after of settlement the XXXX, have the XXX the $XXX very the claims to $XX.X remaining reserved against we

returning to Income investments. income The million $XX.X equity tax higher from was $X.X Now of increase, unrealized during this mostly on tax an prior results gains the consolidated expense, year year-over-year compared results. quarter benefit with million quarter. net

grade, million $XXX.X of investment short March debt-to-capital December and investment we As and ratio income company stood changes securities. at which XXXX, compared equivalence $X.X And business on XX% significant XX, billion its no portfolio believe of our debt. cash X% in were of the XX, support long-term fixed There to was at had in X.X% operations. XXXX. remain We well-capitalized or cash stood with our

Q&A please the Operator, questions. open session. call now proceed to will We for our

Operator

with And Thank we’ll hear from X [Operator Scott Knots. Green you. Instructions]

Scott Green

guys. you me for Thank you okay? questions. the Can Hey hear

Bobby Garcia

Scott. Morning Yes.

Scott Green

good Great, morning.

So came I be Anything sense get in my just first of quarter how wanted question or might the expectations. that negative. results the your positive That is was helpful. for versus to that your

First question?

Bobby Garcia

line in expectations. in short, our was Scott For it with

Juan Jose Roman

Yes.

a That’s line. is in in than As the bobby expected. that We said, probably increase membership one business. saw higher Medicaid higher in the certainly definitely it’s little

Scott Green

health And the on reserves. insurance Okay. a question on the,

payable? days there, that in about increase little days talk in claims Can up So metric year-over-year. payable what a that I days noticed XX driving nine you claims which the about bit days, days, the is in was sequentially five is

Juan Jose Roman

again, the of we Yes, Scott. there said, quarter, Mostly in year, the end – last as increase the first, at significant was claims.

the is the claims of basically that went years’. the last we back. to pent-up demand So with the year This as of reduction number that claims basically, is year was utilization increase our of is for part up compared our and

have in basically that. we So and part is nothing there’s the that outside an no other MA products. And in membership that’s major then of the increase – MA our

Scott Green

Okay. Being like member in you’ve little capture wanted year you health On a that, talked press seems in you’ve especially some this how done including a to risk scores. ask really that premium about getting some to scores, job. to able rates? And you’ve how about I from MA what what other been a showing sure you’ve your risk have insurance release put from mentioned their the managing place those you good those. headwinds the to rates able benefited, plans you’re been scores up make bit talk in Can be premium considering

Juan Jose Roman

have Yes, continued Scott. we right. Well, our process,

membership. our primary our from that our information We necessary have receiving physicians been together order IPA’s, with care the in maintain is to working

work just we make actually documentation. going getting to with to right the people offices, us that, help primary also that with, the of we’re care basically So sure a team

not said the just team So especially to our business. as process. street we from usual we that that again the starting critical of with really was third were process to that very for changed significant probably the and a you effort lose active going from But as pandemic, into our really, back sure making paramedical of quarter has information physician. possible, get tried meeting It do don’t back, this well XXXX, obviously be able we where as our because in

Scott Green

Okay, great.

I for and the with some out you forth XXs rates know the reconciliations substantial MLR the as you sequentially turned Can the the showed low how be now be we’re, it there’s MLR to that’s stable? expected in to I you view and talk about And think are very they need in where back reform especially improvements, or Medicaid going On government. XXs been past MLR now. the into the that

where it should forward? So going that’s be

Juan Jose Roman

Yes.

item, year making of recognized previous the the we with very some So that call better As But in of part that the from as right? in the it well you that, reconciliation. as said, with the And PMPM QX. government. that a in continue was premium couple we We higher care or and seeing we we’re And membership given process business, right PMPM the classified to improve continue the addition are getting to also government. sale. a reconciliations

it’s a So combination of both.

other a to done hand, incremental we so some better seeing We’re related on revenue the hand. on one year. And from reconciliation those that getting process last come did

In the terms year. of for the MLR remainder of expected

the expecting are XXs. be that We to in lower

Scott Green

guidance, MLR MLR XX has to first XX.X, know full for be XX. I historically the tended overall year. to quarter believe highest year the quarter Okay. the And I of

you your normalizing progression this versus year. when especially Although your yes. this full you you’re of seasonal year utilization about, first the In expecting have in history little was MLR, results the bit in what terms guidance? relation quarter the to and outlook a highest Can talk to of quarter relative

Juan Jose Roman

in back, It’s some orders basically to saw with part is important month expect do We year, compare pre-pandemic are really the utilization is usual overall, when when and items Yes. So basically, that eliminated. right? But we an the waivers our the combination obviously, but than are right? we believe we be March look utilization the see levels, came at to most there, of and second of higher slow. a we the improvement highest is half that back

really, of policies section I as in mentioned my points incremental payment basis MLR. and XXX waivers the So represented around

been waivers effective Others July. the in be of already has April. will Some eliminated

have improvement, the some MLR. So money, just year waivers now a do is we expect with because we from cost increase not will that what to those end right, progression

line just of all do of in see our So expect three the of the waivers because to have today. the businesses improvements we’ll that we businesses, elimination for place for

Scott Green

of Okay, is place a in April of that or great. now being might one be? Are that like waivers what that are are there July? two examples what example were couple, an there something either Curious or in waved

Juan Jose Roman

allowed example, was not For will admissions the of concurrent during Right. and review that hospital pandemic back. that come

are the the right. soon get reviews soon And pharmacy we As next, definitely have [indiscernible] or the also next as your time was eliminated. some yes, waivers that impact. eliminate too period, in out refill two the has To

calls, basically previous we mentioned decreasing, of As pharmacy. in exception I the saw with significant a the have everything

expect is back one too expense then once normal, that’s to example we soon, So that pharmacy. controlled should for in refill do we see

Scott Green

it. Okay. you outcomes side, Got a bunch could Hurricane the little on have so large claims and are at potential progress just range guess elaborate bit this with at if the this then way, Maria of claim how the out of point claimants process, the settling Great. court And, about a your level? and reserve with of your reserve biggest the and to on with experience claims the and you’re you level of there. congratulations point, just thinking left relative that the I

Bobby Garcia

would time, it able these number we the we solid. where to have in that settle all suggests about take record and think of that that right, the within methodology a with is over same over together settled overall And reserve put remain And Sure. basically cases think, been cases in all you those all our are XX% we’ve open court to and all a been experience exceptions. within that. levels, when court, the those able I’ll track claims, say our Scott a cases that settle with we’ve and reserves. you of are you few at overall, when I we, XX% and of

we for why is So be being remaining a that’s cases court and with confident those our reserve that reserve who, levels. to respect the solid are have says basis that one continue our And unreasonable in we position the levels. claimants to in

Scott Green

Great.

either there be Okay. could some of this finalized, take believe out the term, up last near how comfort terms be court some something in these, been claims Is X% you is cases it specifically more and resolution and them to of and And a to while think a you cases and the caught of forward? just this reason the or anything about for of played were your know level favorably. just some how where, on, else going wanted in secondly, could against last around your there resolving reserves plays to seeing the you quarter that in lastly out? I have it of these to more and adjusted then how does ask defend experience timing

in two to So, on are you. last just that. my questions. Those wanted Thank check

Bobby Garcia

want than one right? I’ll, say, I’d of behind say in and matter add legitimate cases anything that whole our interest of Well, with insured There’s addressing the customers. the you putting part this cases, in sure. answer give always settling greater to you’d interested let a no like us Yes, and closing we’re claims these and us

system slow. the other notoriously on Puerto is the hand, So court that Rico

within keep we’ve so give and to continue active say more time you’re these the set adjustment we increase these was litigating been everything within settlements. loss last do to In reason expenses, to for cases. somewhat right, And our continue dry that did we’ll and expenses sure reasonable a with that want powder let’s us and vigorously budget, meantime, negotiate those in and the court to we cases make to who table contest

this Juan else? of add to to, at we LAE. don’t reason so And point, to that a see anything estimate

Juan Jose Roman

right that’s that Scott, haven’t point, Bobby on in said I think terms of we were timing, cases court. closing as in No, actually been

soon, of have really through really, process. don’t sort we were there a go even to whole So

settle. some those that good news, So the are of those

So expect XXX right? but we in will continue Bobby that only as It’s And now. said, of most what court. them slowly is are we steady,

There are out with discussions. of continue making in we offers many however, some progress So those. with there our

we positive closing in those cases, cautiously will we’re even aren’t that that continue So court.

very so but will will year we expectation it probably you slowly a us a another half. will but will year, Bobby a could that’s what is quarter, is timing, want see half. every of close that it cases term and in with to So some our reserve, take only because it’s I year XXX, our steady take that expectation, depend, see, What we’re quarter, again, said reaffirm them. comfortable and but every

we have today, closed in lower happy biggest we number our the terms outstanding and are of cases because we haven’t been to total case. of report Now, value closing that

they smaller $XX two now even And less gave or one million, have over lot comfort. at we us So are right? but least that than have cases, past. a also mean doesn’t that the That we of much in

One of I right you we’re the we’ll at do reserve for always on a things the vis-a-vis point. full our I cases slightly tell back pay were our reserve vis-a-vis what that our lower When how closing look look than were said, XXXX, at year, basically reserve. And can we we the in reserve. we we

Scott Green

great. That’s And update. results. the on for congratulations Thanks that

Juan Jose Roman

it. Appreciate

Bobby Garcia

Thank you, Scott.

Operator

And would question-and-answer this the like additional Instructions] or at back I that closing to time, Bobby turn will Garcia session [Operator for conclude any to call the remarks.

Bobby Garcia

Thank you, Operator.

partner. know, thank certainly call great all. I for you’ve with you really been Juan you Triple-S. final a this earnings Jose’s As will Juan be

meantime, [indiscernible] to have that’s day. reach dedication please patient-centered make recognize the I have quality will navigated your great delivery our if care support; during call Triple-S the you ongoing pandemic and today more You’ve committed for out everyone time continued efforts you today forward done to questions team again a their want look summer in system, outcomes. while to also, Triple-S focused that on We In the on building with the I think entire a and second any and it earnings and quarter health environment, outstanding talking to call. as we’ve company staying strong is for the thank and

Operator

will that participation. And your today’s call. We you conclude thank for

Triple-s Management (GTS) 9 May 212021 Q1 Earnings call transcript