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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Triple S Management Corporation | NYSE:GTS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 35.99 | 0 | 01:00:00 |
Puerto Rico
|
|
66-0555678
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
1441 F.D. Roosevelt Avenue
|
|
|
San Juan,
Puerto Rico
|
|
00920
|
(Address of principal executive offices)
|
|
(Zip code)
|
(787)
749-4949
|
(Registrant’s telephone number, including area code)
|
Not applicable
|
(Former name, former address and former fiscal year, if changed since last report)
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $1.00 par value
|
GTS
|
New York Stock Exchange (NYSE)
|
Large accelerated filer ☐
|
Accelerated filer ☑
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
Title of each class
|
Outstanding at September 30, 2021
|
Common Stock, $1.00 par value
|
23,794,612
|
3
|
|
28
|
|
28
|
|
28
|
|
29
|
|
33
|
|
33
|
|
34
|
|
36
|
|
39
|
|
40
|
|
41
|
|
43
|
|
43
|
|
44
|
|
44
|
|
44
|
|
45
|
|
45
|
|
45
|
|
45
|
|
46
|
|
47
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Assets
|
||||||||
Investments and cash:
|
||||||||
Fixed-maturities available-for-sale, at fair value
|
$
|
1,290,234
|
$
|
1,342,465
|
||||
Fixed-maturities held-to-maturity, at amortized cost
|
1,870
|
1,867
|
||||||
Equity investments, at fair value
|
518,765
|
404,328
|
||||||
Other invested assets, at net asset value
|
119,396
|
114,905
|
||||||
Policy loans
|
10,480
|
10,459
|
||||||
Cash and cash equivalents
|
122,709
|
110,989
|
||||||
Total investments and cash
|
2,063,454
|
1,985,013
|
||||||
Premiums and other receivables, net
|
496,477
|
488,840
|
||||||
Deferred policy acquisition costs and value of business acquired
|
255,010
|
248,325
|
||||||
Property and equipment, net
|
137,762
|
131,974
|
||||||
Deferred tax asset
|
111,206
|
119,534
|
||||||
Goodwill
|
28,614
|
28,614
|
||||||
Other assets
|
99,143
|
86,118
|
||||||
Total assets
|
$
|
3,191,666
|
$
|
3,088,418
|
||||
Liabilities and Stockholders’ Equity
|
||||||||
Claim liabilities
|
$
|
798,508
|
$
|
787,102
|
||||
Liability for future policy benefits
|
438,008
|
414,997
|
||||||
Unearned premiums
|
101,331
|
97,481
|
||||||
Policyholder deposits
|
214,912
|
206,109
|
||||||
Liability to Federal Employees’ Health Benefits and Federal Employees’ Programs
|
35,358
|
45,109
|
||||||
Accounts payable and accrued liabilities
|
389,918
|
332,699
|
||||||
Deferred tax liability
|
13,533
|
15,046
|
||||||
Short-term borrowings
|
-
|
30,000
|
||||||
Long-term borrowings
|
49,498
|
52,751
|
||||||
Liability for pension benefits
|
133,659
|
139,611
|
||||||
Total liabilities
|
2,174,725
|
2,120,905
|
||||||
Stockholders’ equity:
|
||||||||
Triple-S Management Corporation stockholders’ equity
|
||||||||
Common stock, $1 par value. Authorized 100,000,000 shares;
|
|
|
||||||
issued and outstanding 23,794,612 and 23,430,292 shares at | ||||||||
September 30, 2021 and December 31, 2020, respectively | 23,795 | 23,430 | ||||||
Additional paid-in capital
|
63,471
|
57,399
|
||||||
Retained earnings
|
952,258
|
897,221
|
||||||
Accumulated other comprehensive loss, net
|
(21,850
|
)
|
(9,820
|
)
|
||||
Total Triple-S Management Corporation stockholders’ equity
|
1,017,674
|
968,230
|
||||||
Non-controlling interest in consolidated subsidiary
|
(733
|
)
|
(717
|
)
|
||||
Total stockholders’ equity
|
1,016,941
|
967,513
|
||||||
Total liabilities and stockholders’ equity
|
$
|
3,191,666
|
$
|
3,088,418
|
|
Three months ended
September 30,
|
Nine
months ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Revenues
|
||||||||||||||||
Premiums earned, net
|
$
|
1,019,696
|
$
|
922,934
|
$
|
3,016,012
|
$
|
2,657,366
|
||||||||
Administrative service fees
|
3,875
|
3,752
|
9,316
|
8,755
|
||||||||||||
Net investment income
|
17,572
|
14,168
|
46,178
|
42,294
|
||||||||||||
Other operating revenues
|
3,925
|
2,052
|
8,518
|
6,394
|
||||||||||||
Total operating revenues
|
1,045,068
|
942,906
|
3,080,024
|
2,714,809
|
||||||||||||
Net realized investment gains (losses)
|
1,015
|
507
|
3,746
|
(180
|
)
|
|||||||||||
Net unrealized investment (losses) gains on equity investments
|
(7,912
|
)
|
11,040
|
13,383
|
(17,428
|
)
|
||||||||||
Other income, net
|
11,085
|
1,811
|
19,047
|
6,217
|
||||||||||||
Total revenues
|
1,049,256
|
956,264
|
3,116,200
|
2,703,418
|
||||||||||||
Benefits and expenses
|
||||||||||||||||
Claims incurred, net of reinsurance
|
878,947
|
761,792
|
2,573,569
|
2,129,401
|
||||||||||||
Operating expenses
|
154,526
|
158,809
|
456,880
|
499,669
|
||||||||||||
Total operating costs
|
1,033,473
|
920,601
|
3,030,449
|
2,629,070
|
||||||||||||
Interest expense
|
2,016
|
2,096
|
6,225
|
5,813
|
||||||||||||
Total benefits and expenses
|
1,035,489
|
922,697
|
3,036,674
|
2,634,883
|
||||||||||||
Income before taxes
|
13,767
|
33,567
|
79,526
|
68,535
|
||||||||||||
Income tax expense
|
5,607
|
9,989
|
24,505
|
27,520
|
||||||||||||
Net income
|
8,160
|
23,578
|
55,021
|
41,015
|
||||||||||||
Net loss attributable to non-controlling interest
|
7
|
3
|
16
|
20
|
||||||||||||
Net income attributable to Triple-S Management Corporation
|
$
|
8,167
|
$
|
23,581
|
$
|
55,037
|
$
|
41,035
|
||||||||
Earnings per share attributable to Triple-S Management Corporation
|
||||||||||||||||
Basic net income per share
|
$
|
0.35
|
$
|
1.02
|
$
|
2.35
|
$
|
1.77
|
||||||||
Diluted net income per share
|
$
|
0.35
|
$
|
1.02
|
$
|
2.34
|
$
|
1.76
|
|
Three months ended
September 30,
|
Nine
months ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Net income
|
$
|
8,160
|
$
|
23,578
|
$
|
55,021
|
$
|
41,015
|
||||||||
Other comprehensive income (loss), net of tax:
|
||||||||||||||||
Net unrealized change in fair value of available-for-sale securities, net of taxes
|
421
|
4,743
|
(13,869
|
)
|
32,023
|
|||||||||||
Defined benefit pension plan:
|
||||||||||||||||
Actuarial loss, net
|
621
|
247
|
1,839
|
553
|
||||||||||||
Total other comprehensive income (loss), net of tax
|
1,042
|
4,990
|
(12,030
|
)
|
32,576
|
|||||||||||
Comprehensive income
|
9,202
|
28,568
|
42,991
|
73,591
|
||||||||||||
Comprehensive loss attributable to non-controlling interest
|
7
|
3
|
16
|
20
|
||||||||||||
Comprehensive income attributable to Triple-S Management Corporation
|
$
|
9,209
|
$
|
28,571
|
$
|
43,007
|
$
|
73,611
|
|
Class A
Common
Stock
|
Class B
Common
Stock
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
(Loss) Income
|
Triple-S
Management
Corporation
Stockholders’
Equity
|
Non-controlling
Interest in
Consolidated
Subsidiary
|
Total
Stockholders’
Equity
|
||||||||||||||||||||||||
Balance, December 31, 2020
|
$
|
-
|
$
|
23,430
|
$
|
57,399
|
$
|
897,221
|
$
|
(9,820
|
)
|
$
|
968,230
|
$
|
(717
|
)
|
$
|
967,513
|
||||||||||||||
Share-based compensation
|
-
|
250
|
932
|
-
|
-
|
1,182
|
-
|
1,182
|
||||||||||||||||||||||||
Comprehensive income (loss)
|
-
|
-
|
-
|
23,310
|
(15,944
|
)
|
7,366
|
(3
|
)
|
7,363
|
||||||||||||||||||||||
Balance, March 31, 2021
|
$
|
-
|
$
|
23,680
|
$
|
58,331
|
$
|
920,531
|
$
|
(25,764
|
)
|
$
|
976,778
|
$
|
(720
|
)
|
$
|
976,058
|
||||||||||||||
Share-based compensation
|
-
|
137
|
2,614
|
-
|
-
|
2,751
|
-
|
2,751
|
||||||||||||||||||||||||
Repurchase and retirement of common stock
|
-
|
(21
|
)
|
(461
|
)
|
-
|
-
|
(482
|
)
|
-
|
(482
|
)
|
||||||||||||||||||||
Comprehensive income (loss)
|
-
|
-
|
-
|
23,560
|
2,872
|
26,432
|
(6
|
)
|
26,426
|
|||||||||||||||||||||||
Balance, June 30, 2021
|
$
|
-
|
$
|
23,796
|
$
|
60,484
|
$
|
944,091
|
$
|
(22,892
|
)
|
$
|
1,005,479
|
$
|
(726
|
)
|
$
|
1,004,753
|
||||||||||||||
Share-based compensation
|
- | 1 | 3,030 | - | - | 3,031 | - | 3,031 | ||||||||||||||||||||||||
Repurchase and retirement of common stock
|
- | (2 | ) | (43 | ) | - | - | (45 | ) | - | (45 | ) | ||||||||||||||||||||
Comprehensive income (loss)
|
- | - | - | 8,167 | 1,042 | 9,209 | (7 | ) | 9,202 | |||||||||||||||||||||||
Balance, September 30, 2021
|
$ | - | $ | 23,795 | $ | 63,471 | $ | 952,258 | $ | (21,850 | ) | $ | 1,017,674 | $ | (733 | ) | $ | 1,016,941 | ||||||||||||||
Balance, December 31, 2019
|
$
|
-
|
$
|
23,800
|
$
|
60,504
|
$
|
830,198
|
$
|
29,363
|
$
|
943,865
|
$
|
(693
|
)
|
$
|
943,172
|
|||||||||||||||
Share-based compensation
|
-
|
590
|
1,769
|
-
|
-
|
2,359
|
-
|
2,359
|
||||||||||||||||||||||||
Repurchase and retirement of common stock
|
-
|
(584
|
)
|
(8,511
|
)
|
-
|
-
|
(9,095
|
)
|
-
|
(9,095
|
)
|
||||||||||||||||||||
Comprehensive income (loss)
|
-
|
-
|
-
|
(26,145
|
)
|
16,032
|
(10,113
|
)
|
(7
|
)
|
(10,120
|
)
|
||||||||||||||||||||
Cumulative effect adjustment due to implementation of ASU 2016-13
|
-
|
-
|
-
|
(166
|
)
|
-
|
(166
|
)
|
-
|
(166
|
)
|
|||||||||||||||||||||
Balance, March 31, 2020
|
$
|
-
|
$
|
23,806
|
$
|
53,762
|
$
|
803,887
|
$
|
45,395
|
$
|
926,850
|
$
|
(700
|
)
|
$
|
926,150
|
|||||||||||||||
Share-based compensation
|
-
|
7
|
4,228
|
-
|
-
|
4,235
|
-
|
4,235
|
||||||||||||||||||||||||
Repurchase and retirement of common stock
|
-
|
(375
|
)
|
(5,618
|
)
|
-
|
-
|
(5,993
|
)
|
-
|
(5,993
|
)
|
||||||||||||||||||||
Comprehensive income (loss)
|
-
|
-
|
-
|
43,599
|
11,554
|
55,153
|
(10
|
)
|
55,143
|
|||||||||||||||||||||||
Balance, June 30, 2020
|
$
|
-
|
$
|
23,438
|
$
|
52,372
|
$
|
847,486
|
$
|
56,949
|
$
|
980,245
|
$
|
(710
|
)
|
$
|
979,535
|
|||||||||||||||
Share-based compensation
|
- | 7 | 1,842 | - | - | 1,849 | - | 1,849 | ||||||||||||||||||||||||
Repurchase and retirement of common stock
|
- | (15 | ) | (250 | ) | - | - | (265 | ) | - | (265 | ) | ||||||||||||||||||||
Comprehensive income (loss)
|
- | - | - | 23,581 | 4,990 | 28,571 | (3 | ) | 28,568 | |||||||||||||||||||||||
Balance, September 30, 2020
|
$ | - | $ | 23,430 | $ | 53,964 |
$
|
871,067 | $ | 61,939 | $ | 1,010,400 | $ | (713 | ) | $ | 1,009,687 |
|
Nine
months ended
September 30,
|
|||||||
|
2021
|
2020
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
55,021
|
$
|
41,015
|
||||
Adjustments to reconcile net income to net cash
|
||||||||
provided by operating activities:
|
||||||||
Depreciation and amortization
|
10,667
|
10,855
|
||||||
Net amortization of investments
|
2,290
|
2,151
|
||||||
(Reversal) provision for doubtful receivables
|
(340
|
)
|
2,229
|
|||||
Deferred tax expense
|
8,635
|
2,277
|
||||||
Net realized investment (gains) losses on sale of securities
|
(3,746
|
)
|
180
|
|||||
Net unrealized (gains) losses on equity investments
|
(13,383
|
)
|
17,428
|
|||||
Interest credited to policyholder deposits
|
4,874
|
4,788
|
||||||
Share-based compensation
|
6,964
|
8,443
|
||||||
Gain on sale of property and equipment
|
-
|
154
|
||||||
(Increase) decrease in assets:
|
||||||||
Premium and other receivables, net
|
(7,811
|
)
|
26,038
|
|||||
Deferred policy acquisition costs and value of business acquired
|
(5,474
|
)
|
(10,827
|
)
|
||||
Deferred taxes
|
45
|
(109
|
)
|
|||||
Other assets
|
(11,197
|
)
|
(29,831
|
)
|
||||
Increase (decrease) in liabilities:
|
||||||||
Claim liabilities
|
11,406
|
77,662
|
||||||
Liability for future policy benefits
|
23,011
|
22,099
|
||||||
Unearned premiums
|
3,850
|
2,307
|
||||||
Liability to Federal Employees’ Health Benefits and Federal Employees’ Programs
|
(9,751
|
)
|
10,093
|
|||||
Accounts payable and accrued liabilities
|
25,638
|
36,729
|
||||||
Net cash provided by operating activities
|
100,699
|
223,681
|
|
Nine
months ended
September 30,
|
|||||||
|
2021
|
2020
|
||||||
Cash flows from investing activities:
|
||||||||
Proceeds from investments sold or matured:
|
||||||||
Securities available for sale:
|
||||||||
Fixed-maturities sold
|
$
|
140,866
|
$
|
94,557
|
||||
Fixed-maturities matured/called
|
18,271
|
37,450
|
||||||
Securities held to maturity:
|
||||||||
Fixed-maturities matured/called
|
747
|
1,079
|
||||||
Equity investments sold
|
99,951
|
80,152
|
||||||
Other invested assets sold
|
19,652
|
13,231
|
||||||
Acquisition of investments:
|
||||||||
Securities available for sale:
|
||||||||
Fixed-maturities
|
(129,066
|
)
|
(206,387
|
)
|
||||
Securities held to maturity:
|
||||||||
Fixed-maturities
|
(751
|
)
|
(1,087
|
)
|
||||
Equity investments
|
(199,046
|
)
|
(201,324
|
)
|
||||
Other invested assets
|
(9,317
|
)
|
(25,442
|
)
|
||||
Increase in other investments
|
(4,470
|
)
|
(3,924
|
)
|
||||
Net change in policy loans
|
(21
|
)
|
240
|
|||||
Net capital expenditures
|
(16,948
|
)
|
(52,549
|
)
|
||||
Capital contribution on equity method investees
|
-
|
(7,083
|
)
|
|||||
Net cash used in investing activities
|
(80,132
|
)
|
(271,087
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Change in outstanding checks in excess of bank balances
|
20,594
|
16,814
|
||||||
Net change in short-term borrowings
|
(30,000
|
)
|
28,500
|
|||||
Proceeds from long-term borrowings
|
-
|
30,841
|
||||||
Repayments of long-term borrowings
|
(3,370
|
)
|
(2,760
|
)
|
||||
Repurchase and retirement of common stock
|
-
|
(14,980
|
)
|
|||||
Proceeds from policyholder deposits
|
12,594
|
21,586
|
||||||
Surrenders of policyholder deposits
|
(8,665
|
)
|
(12,829
|
)
|
||||
Net cash (used in) provided by financing activities
|
(8,847
|
)
|
67,172
|
|||||
Net increase in cash and cash equivalents
|
11,720
|
19,766
|
||||||
Cash and cash equivalents:
|
||||||||
Beginning of period
|
110,989
|
109,837
|
||||||
End of period
|
$
|
122,709
|
$
|
129,603
|
1. |
Basis of Presentation
|
2. |
Significant Accounting Policies
|
3. |
Investment in Securities
|
|
September 30,
2021
|
|||||||||||||||
|
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Estimated
fair value
|
||||||||||||
Fixed-maturities available-for-sale
|
||||||||||||||||
Obligations of government-sponsored enterprises
|
$
|
21,303
|
$
|
294
|
$
|
(53
|
)
|
$
|
21,544
|
|||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities
|
104,546
|
5,367
|
(4
|
)
|
109,909
|
|||||||||||
Municipal securities
|
611,211
|
40,598
|
(853
|
)
|
650,956
|
|||||||||||
Corporate bonds
|
177,640
|
23,510
|
(69
|
)
|
201,081
|
|||||||||||
Residential mortgage-backed securities
|
284,745
|
16,807
|
(546
|
)
|
301,006
|
|||||||||||
Collateralized mortgage obligations
|
5,301
|
437
|
-
|
5,738
|
||||||||||||
Total fixed-maturities available-for-sale
|
$
|
1,204,746
|
$
|
87,013
|
$
|
(1,525
|
)
|
$
|
1,290,234
|
|
December 31, 2020
|
|||||||||||||||
|
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Estimated
fair value
|
||||||||||||
Fixed-maturities available-for-sale
|
||||||||||||||||
Obligations of government-sponsored enterprises
|
$
|
24,496
|
$
|
665
|
$
|
(9
|
)
|
$
|
25,152
|
|||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities
|
103,694
|
7,993
|
-
|
111,687
|
||||||||||||
Municipal securities
|
646,961
|
54,067
|
-
|
701,028
|
||||||||||||
Corporate bonds
|
189,516
|
30,280
|
-
|
219,796
|
||||||||||||
Residential mortgage-backed securities
|
249,801
|
21,487
|
(57
|
)
|
271,231
|
|||||||||||
Collateralized mortgage obligations
|
12,954
|
638
|
(21
|
)
|
13,571
|
|||||||||||
Total fixed-maturities available-for-sale
|
$
|
1,227,422
|
$
|
115,130
|
$
|
(87
|
)
|
$
|
1,342,465
|
|
September 30,
2021
|
|||||||||||||||
|
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Estimated
fair value
|
||||||||||||
Fixed-maturities held-to-maturity
|
||||||||||||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities
|
$
|
613
|
$
|
154
|
$
|
-
|
$
|
767
|
||||||||
Residential mortgage-backed securities
|
164
|
8
|
-
|
172
|
||||||||||||
Certificates of deposit
|
1,093
|
-
|
-
|
1,093
|
||||||||||||
Total fixed-maturities held-to-maturity
|
$
|
1,870
|
$
|
162
|
$
|
-
|
$
|
2,032
|
|
December 31, 2020
|
|||||||||||||||
|
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Estimated
fair value
|
||||||||||||
Fixed-maturities held-to-maturity
|
||||||||||||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities
|
$
|
614
|
$
|
201
|
$
|
-
|
$
|
815
|
||||||||
Residential mortgage-backed securities
|
164
|
17
|
-
|
181
|
||||||||||||
Certificates of deposit
|
1,089
|
-
|
-
|
1,089
|
||||||||||||
Total fixed-maturities held-to-maturity
|
$
|
1,867
|
$
|
218
|
$
|
-
|
$
|
2,085
|
September 30,
2021
|
||||||||||||||||
|
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Estimated
fair value
|
||||||||||||
|
||||||||||||||||
Other invested assets - Alternative investments
|
$
|
105,151
|
$
|
17,908
|
$
|
(3,663
|
)
|
$
|
119,396
|
|
December 31, 2020
|
|||||||||||||||
|
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Estimated
fair value
|
||||||||||||
|
||||||||||||||||
Other invested assets - Alternative investments
|
$
|
112,171
|
$
|
6,119
|
$
|
(3,385
|
)
|
$
|
114,905
|
|
September 30,
2021
|
|||||||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or longer
|
Total
|
||||||||||||||||||||||||||||||||||
|
Estimated
Fair Value
|
Gross
Unrealized
Loss
|
Number of
Securities
|
Estimated
Fair Value
|
Gross
Unrealized
Loss
|
Number of
Securities
|
Estimated
Fair Value
|
Gross
Unrealized
Loss
|
Number of
Securities
|
|||||||||||||||||||||||||||
Fixed-maturities available-for-sale
|
||||||||||||||||||||||||||||||||||||
Obligations of government-sponsored enterprises
|
$
|
4,665
|
$
|
(22
|
)
|
4
|
$
|
1,518
|
$
|
(31
|
)
|
1
|
$
|
6,183
|
$
|
(53
|
)
|
5
|
||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities
|
983 | (4 | ) | 1 | - | - | - | 983 | (4 | ) | 1 | |||||||||||||||||||||||||
Municipal securities
|
70,535
|
(853
|
)
|
16
|
-
|
-
|
-
|
70,535
|
(853
|
)
|
16
|
|||||||||||||||||||||||||
Corporate bonds
|
3,931
|
(69
|
)
|
1
|
-
|
-
|
-
|
3,931
|
(69
|
)
|
1
|
|||||||||||||||||||||||||
Residential mortgage-backed securities
|
48,592
|
(546
|
)
|
13
|
-
|
-
|
-
|
48,592
|
(546
|
)
|
13
|
|||||||||||||||||||||||||
Total fixed-maturities available-for-sale
|
$
|
128,706
|
$
|
(1,494
|
)
|
35
|
$
|
1,518
|
$
|
(31
|
)
|
1
|
$
|
130,224
|
$
|
(1,525
|
)
|
36
|
||||||||||||||||||
Other invested assets - Alternative investments
|
$
|
2,439
|
$
|
(105
|
)
|
2
|
$
|
18,022
|
$
|
(3,558
|
)
|
7
|
$
|
20,461
|
$
|
(3,663
|
)
|
9
|
|
December 31, 2020
|
|||||||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or longer
|
Total
|
||||||||||||||||||||||||||||||||||
|
Estimated
Fair Value
|
Gross
Unrealized
Loss
|
Number of
Securities
|
Estimated
Fair Value
|
Gross
Unrealized
Loss
|
Number of
Securities
|
Estimated
Fair Value
|
Gross
Unrealized
Loss
|
Number of
Securities
|
|||||||||||||||||||||||||||
Fixed-maturities available-for-sale
|
||||||||||||||||||||||||||||||||||||
Obligations of government-sponsored enterprises
|
$
|
1,539
|
$
|
(9
|
)
|
1
|
$
|
-
|
$
|
-
|
-
|
$
|
1,539
|
$
|
(9
|
)
|
1
|
|||||||||||||||||||
Residential mortgage-backed securities
|
3,624
|
(57
|
)
|
1
|
-
|
-
|
-
|
3,624
|
(57
|
)
|
1
|
|||||||||||||||||||||||||
Collateralized mortgage obligations
|
6,060
|
(21
|
)
|
2
|
-
|
-
|
-
|
6,060
|
(21
|
)
|
2
|
|||||||||||||||||||||||||
Total fixed-maturities available-for-sale
|
$
|
11,223
|
$
|
(87
|
)
|
4
|
$
|
-
|
$
|
-
|
-
|
$
|
11,223
|
$
|
(87
|
)
|
4
|
|||||||||||||||||||
Other invested assets - Alternative investments
|
$
|
12,584
|
$
|
(808
|
)
|
4
|
$
|
16,396
|
$
|
(2,577
|
)
|
6
|
$
|
28,980
|
$
|
(3,385
|
)
|
10
|
•
|
Obligations of government-sponsored enterprises, U.S. treasury securities and obligations of U.S government instrumentalities,
and Municipal securities: The unrealized losses of these securities were mainly caused by fluctuations in interest rates and general market conditions. The contractual terms of these investments do not permit the issuer to settle the
securities at a price less than the par value of the investment. In addition, they have investment-grade ratings. The Company does not consider these investments to be credit-impaired because of several factors: the decline in fair value is
attributable to changes in interest rates and not credit quality; the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their
amortized cost basis, which may be at maturity; and because the Company expects to collect all contractual cash flows.
|
•
|
Corporate bonds: The unrealized losses of these bonds were mainly caused by fluctuations in interest rates and general market
conditions. All corporate bonds with an unrealized loss have investment grade ratings. The Company does not consider these investments to be credit-impaired because of several factors: the decline in fair value is attributable to changes
in interest rates and not credit quality; the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which
may be at maturity; and because the Company expects to collect all contractual cash flows.
|
•
|
Residential mortgage-backed securities: The unrealized losses on these investments were mostly caused by fluctuations in interest
rates and credit spreads. The contractual cash flows of these securities are guaranteed by a U.S. government-sponsored enterprise. Any loss in these securities is determined according to the seniority level of each tranche, with the least
senior, typically the unrated residual tranche, taking any initial loss. The investment grade credit rating of our securities reflects the seniority of the securities that the Company owns. The Company does not consider these investments to
be credit-impaired because of several factors: the decline in fair value is attributable to changes in interest rates and not credit quality; the Company does not intend to sell the investments and it is more likely than not that the
Company will not be required to sell the investments before recovery of their amortized cost basis, which may be at maturity; and because the Company expects to collect all contractual cash flows.
|
•
|
Alternative Investments: As of September 30, 2021, alternative investments with unrealized losses were not considered
credit-impaired based on market conditions.
|
|
September 30,
2021
|
|||||||
|
Amortized
cost
|
Estimated
fair value
|
||||||
Fixed-maturities available-for-sale
|
||||||||
Due in one year or less
|
$
|
60,380
|
$
|
61,218
|
||||
Due after one year through five years
|
572,854
|
605,722
|
||||||
Due after five years through ten years
|
149,432
|
157,360
|
||||||
Due after ten years
|
132,034
|
159,190
|
||||||
Residential mortgage-backed securities
|
284,745
|
301,006
|
||||||
Collateralized mortgage obligations
|
5,301
|
5,738
|
||||||
|
$
|
1,204,746
|
$
|
1,290,234
|
||||
Fixed-maturities held-to-maturity
|
||||||||
Due in one year or less
|
$
|
1,093
|
$
|
1,093
|
||||
Due after ten years
|
613
|
767
|
||||||
Residential mortgage-backed securities
|
164
|
172
|
||||||
|
$
|
1,870
|
$
|
2,032
|
4. |
Realized and Unrealized Gains (Losses)
|
|
Three months ended
|
Nine months ended
|
||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Realized gains (losses)
|
||||||||||||||||
Fixed-maturity securities
|
||||||||||||||||
Fixed-maturities available-for-sale
|
||||||||||||||||
Gross gains
|
$
|
-
|
$
|
402
|
$
|
90
|
$
|
1,953
|
||||||||
Gross losses
|
(138
|
)
|
(1
|
)
|
(1,104
|
)
|
(7
|
)
|
||||||||
Total fixed-maturity securities
|
(138
|
)
|
401
|
(1,014
|
)
|
1,946
|
||||||||||
Equity investments
|
||||||||||||||||
Gross gains
|
238
|
67
|
2,121
|
1,057
|
||||||||||||
Gross losses
|
(19
|
)
|
(479
|
)
|
(438
|
)
|
(3,249
|
)
|
||||||||
Gross losses from impaired securities
|
-
|
-
|
-
|
(678
|
)
|
|||||||||||
Total equity investments
|
219
|
(412
|
)
|
1,683
|
(2,870
|
)
|
||||||||||
Other invested assets
|
||||||||||||||||
Gross gains
|
934
|
518
|
3,077
|
744
|
||||||||||||
Total other invested assets
|
934
|
518
|
3,077
|
744
|
||||||||||||
Net realized gains (losses) on securities
|
$
|
1,015
|
$
|
507
|
$
|
3,746
|
$
|
(180
|
)
|
|
Three months ended
September 30,
|
Nine
months ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Changes in net unrealized gains (losses):
|
||||||||||||||||
Recognized in accumulated other comprehensive income (loss):
|
||||||||||||||||
Fixed-maturities – available-for-sale
|
$
|
(3,742
|
)
|
$
|
4,705
|
$
|
(29,555
|
)
|
$
|
44,943
|
||||||
Other invested assets
|
4,136
|
1,498
|
11,511
|
(2,700
|
)
|
|||||||||||
|
$
|
394
|
$
|
6,203
|
$
|
(18,044
|
)
|
$
|
42,243
|
|||||||
Not recognized in the consolidated financial statements:
|
||||||||||||||||
Fixed-maturities – held-to-maturity
|
$
|
(11
|
)
|
$
|
(6
|
)
|
$
|
(56
|
)
|
$
|
64
|
5. |
Premiums and Other Receivables, Net
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Premiums
|
$
|
177,298
|
$
|
106,322
|
||||
Self-funded group receivables
|
27,767
|
26,412
|
||||||
FEHBP
|
15,002
|
12,830
|
||||||
Agent balances
|
30,235
|
31,509
|
||||||
Accrued interest
|
9,206
|
10,418
|
||||||
Reinsurance recoverable
|
157,665
|
216,314
|
||||||
Other
|
128,988
|
135,774
|
||||||
|
546,161
|
539,579
|
||||||
Less allowance for doubtful receivables:
|
||||||||
Premiums
|
34,433
|
37,231
|
||||||
Other
|
15,251
|
13,508
|
||||||
|
49,684
|
50,739
|
||||||
Total premium and other receivables, net
|
$
|
496,477
|
$
|
488,840
|
6. |
Fair Value Measurements
|
|
September 30, 2021
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
||||||||||||||||
Fixed-maturities available-for-sale
|
||||||||||||||||
Obligations of government-sponsored enterprises
|
$
|
-
|
$
|
21,544
|
$
|
-
|
$
|
21,544
|
||||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities
|
109,909
|
-
|
-
|
109,909
|
||||||||||||
Municipal securities
|
-
|
650,956
|
-
|
650,956
|
||||||||||||
Corporate bonds
|
-
|
201,081
|
-
|
201,081
|
||||||||||||
Residential agency mortgage-backed securities
|
-
|
301,006
|
-
|
301,006
|
||||||||||||
Collateralized mortgage obligations
|
-
|
5,738
|
-
|
5,738
|
||||||||||||
Total fixed-maturities available-for-sale
|
$
|
109,909
|
$
|
1,180,325
|
$
|
-
|
$
|
1,290,234
|
||||||||
Equity investments
|
$
|
276,531
|
$
|
236,893
|
$
|
5,341
|
$
|
518,765
|
|
December 31, 2020
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
||||||||||||||||
Fixed-maturities available-for-sale
|
||||||||||||||||
Obligations of government-sponsored enterprises
|
$
|
-
|
$
|
25,152
|
$
|
-
|
$
|
25,152
|
||||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities
|
111,687
|
-
|
-
|
111,687
|
||||||||||||
Municipal securities
|
-
|
701,028
|
-
|
701,028
|
||||||||||||
Corporate bonds
|
-
|
219,796
|
-
|
219,796
|
||||||||||||
Residential agency mortgage-backed securities
|
-
|
271,231
|
-
|
271,231
|
||||||||||||
Collateralized mortgage obligations
|
-
|
13,571
|
-
|
13,571
|
||||||||||||
Total fixed-maturities available-for-sale
|
$
|
111,687
|
$
|
1,230,778
|
$
|
-
|
$
|
1,342,465
|
||||||||
Equity investments
|
$
|
220,118
|
$
|
179,108
|
$
|
5,102
|
$
|
404,328
|
|
Three months ended
|
Nine
months ended
|
||||||
September 30, 2021
|
September 30,
2021
|
|||||||
Beginning Balance
|
$
|
5,199
|
$
|
5,102
|
||||
Unrealized in other accumulated comprehensive income
|
142
|
239
|
||||||
Ending Balance
|
$
|
5,341
|
$
|
5,341
|
7. |
Claim Liabilities
|
|
Nine
months ended
September 30,
2021
|
|||||||||||
|
Managed
Care
|
Other
Business
Segments *
|
Consolidated
|
|||||||||
|
||||||||||||
Claim liabilities at beginning of period
|
$
|
445,655
|
$
|
341,447
|
$
|
787,102
|
||||||
Reinsurance recoverable on claim liabilities
|
-
|
(138,816
|
)
|
(138,816
|
)
|
|||||||
Net claim liabilities at beginning of period
|
445,655
|
202,631
|
648,286
|
|||||||||
Claims incurred
|
||||||||||||
Current period insured events
|
2,485,095
|
92,526
|
2,577,621
|
|||||||||
Prior period insured events
|
(35,986
|
)
|
982
|
|
(35,004
|
)
|
||||||
Total
|
2,449,109
|
93,508
|
2,542,617
|
|||||||||
Payments of losses and loss-adjustment
|
||||||||||||
expenses | ||||||||||||
Current period insured events
|
2,124,676
|
47,360
|
2,172,036
|
|||||||||
Prior period insured events
|
236,405
|
63,086
|
299,491
|
|||||||||
Total
|
2,361,081
|
110,446
|
2,471,527
|
|||||||||
Net claim liabilities at end of period
|
533,683
|
185,693
|
719,376
|
|||||||||
Reinsurance recoverable on claim liabilities
|
-
|
79,132
|
79,132
|
|||||||||
Claim liabilities at end of period
|
$
|
533,683
|
$
|
264,825
|
$
|
798,508
|
* |
Other Business Segments include the Life
Insurance and Property and Casualty segments, as well as intersegment eliminations.
|
|
Nine
months ended
September 30,
2020
|
|||||||||||
|
Managed
Care
|
Other
Business
Segments *
|
Consolidated
|
|||||||||
|
||||||||||||
|
||||||||||||
Claim liabilities at beginning of period
|
$
|
341,277
|
$
|
367,981
|
$
|
709,258
|
||||||
Reinsurance recoverable on claim liabilities
|
-
|
(137,017
|
)
|
(137,017
|
)
|
|||||||
Net claim liabilities at beginning of period
|
341,277
|
230,964
|
572,241
|
|||||||||
Claims incurred
|
||||||||||||
Current period insured events
|
2,000,825
|
84,358
|
2,085,183
|
|||||||||
Prior period insured events
|
24,297
|
|
(7,885
|
)
|
16,412
|
|
||||||
Total
|
2,025,122
|
76,473
|
2,101,595
|
|||||||||
Payments of losses and loss-adjustment
|
||||||||||||
expenses
|
||||||||||||
Current period insured events
|
1,678,400
|
45,815
|
1,724,215
|
|||||||||
Prior period insured events
|
267,427
|
41,081
|
308,508
|
|||||||||
Total
|
1,945,827
|
86,896
|
2,032,723
|
|||||||||
Net claim liabilities at end of period
|
420,572
|
220,541
|
641,113
|
|||||||||
Reinsurance recoverable on claim liabilities
|
-
|
145,807
|
145,807
|
|||||||||
Claim liabilities at end of period
|
$
|
420,572
|
$
|
366,348
|
$
|
786,920
|
* |
Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations.
|
Incurred Year
|
Total of IBNR Liabilities Plus Expected
Development on Reported Claims
|
|||
2020
|
$ |
119,675
|
||
2021
|
360,419
|
8. |
Borrowings
|
• |
In August 2019, TSS and TSV became members of the FHLBNY, which provides access to collateralized advances. The borrowing capacity of TSS and TSV is up
to 15% and 10%,
respectively, of their admitted assets as disclosed in the most recent filing with the Commissioner of Insurance but is constrained by the amount of collateral held at the FHLBNY (see Note 3). As of September 30, 2021 and December 31, 2020,
the borrowing capacity was approximately $192,430 and $200,338, respectively. There was no outstanding balance as
of September 30, 2021. As of December 31, 2020 the outstanding balance was $30,000. The average interest rate of the outstanding
balance was 0.33% as of December 31, 2020.
|
• |
TSA has a $10,000 revolving loan
agreement with a commercial bank in Puerto Rico. This line of credit has an interest rate of 30-day LIBOR plus 250 basis points and contains certain financial and non-financial covenants that are customary for this type of facility. This line of credit
matured on June 30, 2021 and was renewed for an
additional year. There was no outstanding balance as of September 30, 2021.
|
9. |
Pension Plan
|
|
Three months ended
September 30,
|
Nine
months ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Components of net periodic benefit cost:
|
||||||||||||||||
Interest cost
|
$
|
1,370
|
$
|
1,474
|
$
|
4,120
|
$
|
4,554
|
||||||||
Expected return on assets
|
(1,098
|
)
|
(2,211
|
)
|
(3,298
|
)
|
(6,629
|
)
|
||||||||
Amortization of actuarial loss
|
994
|
396
|
2,944
|
884
|
||||||||||||
Settlement loss
|
1,359
|
356
|
3,359
|
1,068
|
||||||||||||
Net periodic benefit cost (income)
|
$
|
2,625
|
$
|
15
|
|
$
|
7,125
|
$
|
(123
|
)
|
10. |
Reinsurance
|
• |
Casualty excess of loss treaty provides reinsurance for losses up to $20,000, subject to a retention of $225.
|
• |
Medical malpractice excess of loss treaty provides reinsurance for losses up to $3,000, subject to a retention of $150.
|
• |
Property reinsurance treaty includes proportional cessions and a per risk excess of loss contract limiting losses to $400 in $30,000 risks.
|
• |
Catastrophe protection is purchased limiting losses to $5,000
per event with losses up to approximately $811,450 in a $816,450 event.
|
11. |
Comprehensive Income (Loss)
|
|
Three months ended
September 30,
|
Nine
months ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Net Unrealized Gain on Securities
|
||||||||||||||||
Beginning Balance
|
$
|
77,399
|
$
|
85,110
|
$
|
91,689
|
$
|
57,830
|
||||||||
Other comprehensive income (loss)
|
||||||||||||||||
before reclassifications | 1,233 | 5,149 | (10,872 | ) | 31,879 | |||||||||||
Amounts reclassified from accumulated | ||||||||||||||||
other comprehensive (loss) income
|
(812
|
)
|
(406
|
)
|
(2,997
|
)
|
144
|
|||||||||
Net current period change
|
421
|
4,743
|
(13,869
|
)
|
32,023
|
|||||||||||
Ending Balance
|
77,820
|
89,853
|
77,820
|
89,853
|
||||||||||||
Liability for Pension Benefits
|
||||||||||||||||
Beginning Balance
|
(100,291
|
)
|
(28,161
|
)
|
(101,509
|
)
|
(28,467
|
)
|
||||||||
Amounts reclassified from accumulated | ||||||||||||||||
other comprehensive income
|
621
|
247
|
1,839
|
553
|
||||||||||||
Ending Balance
|
(99,670
|
)
|
(27,914
|
)
|
(99,670
|
)
|
(27,914
|
)
|
||||||||
Accumulated Other Comprehensive (Loss) Income
|
||||||||||||||||
Beginning Balance
|
(22,892
|
)
|
56,949
|
(9,820
|
)
|
29,363
|
||||||||||
Other comprehensive income (loss) | ||||||||||||||||
before reclassifications
|
1,233
|
5,149
|
(10,872
|
)
|
31,879
|
|||||||||||
Amounts reclassified from accumulated | ||||||||||||||||
other comprehensive (loss) income
|
(191
|
)
|
(159
|
)
|
(1,158
|
)
|
697
|
|||||||||
Net current period change
|
1,042
|
4,990
|
(12,030
|
)
|
32,576
|
|||||||||||
Ending Balance
|
$
|
(21,850
|
)
|
$
|
61,939
|
$
|
(21,850
|
)
|
$
|
61,939
|
12. |
Share-Based Compensation
|
13. |
Net Income Available to Stockholders and Net Income per Share
|
|
Three months ended
September 30,
|
Nine
months ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Numerator for earnings per share:
|
||||||||||||||||
Net income attributable to TSM available to stockholders
|
$
|
8,167
|
$
|
23,581
|
$
|
55,037
|
$
|
41,035
|
||||||||
Denominator for basic earnings per share:
|
||||||||||||||||
Weighted average of common shares
|
23,494,415
|
23,073,511
|
23,402,622
|
23,215,840
|
||||||||||||
Effect of dilutive securities
|
116,257
|
120,469
|
143,655
|
102,229
|
||||||||||||
Denominator for diluted earnings per share
|
23,610,672
|
23,193,980
|
23,546,277
|
23,318,069
|
||||||||||||
Basic net income per share attributable to TSM
|
$
|
0.35
|
$
|
1.02
|
$
|
2.35
|
$
|
1.77
|
||||||||
Diluted net income per share attributable to TSM
|
$
|
0.35
|
$
|
1.02
|
$
|
2.34
|
$
|
1.76
|
14. |
Contingencies
|
15. |
Segment Information
|
|
Three months ended
September 30,
|
Nine
months ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Operating revenues
|
||||||||||||||||
Managed Care:
|
||||||||||||||||
Premiums earned, net
|
$
|
939,210
|
$
|
849,529
|
$
|
2,779,869
|
$
|
2,447,588
|
||||||||
Administrative service fees
|
3,875
|
3,013
|
9,316
|
8,755
|
||||||||||||
Intersegment premiums/service fees
|
598
|
644
|
2,319
|
2,624
|
||||||||||||
Net investment income
|
8,088
|
5,065
|
19,088
|
14,763
|
||||||||||||
Total Managed Care
|
951,771
|
858,251
|
2,810,592
|
2,473,730
|
||||||||||||
Life Insurance:
|
||||||||||||||||
Premiums earned, net
|
54,394
|
49,616
|
159,783
|
143,325
|
||||||||||||
Intersegment premiums
|
636
|
516
|
1,811
|
1,552
|
||||||||||||
Net investment income
|
6,785
|
6,900
|
19,851
|
20,625
|
||||||||||||
Total Life Insurance
|
61,815
|
57,032
|
181,445
|
165,502
|
||||||||||||
Property and Casualty Insurance:
|
||||||||||||||||
Premiums earned, net
|
26,092
|
23,789
|
76,360
|
66,453
|
||||||||||||
Intersegment premiums
|
153
|
153
|
460
|
460
|
||||||||||||
Net investment income
|
2,569
|
2,103
|
6,847
|
6,551
|
||||||||||||
Total Property and Casualty insurance
|
28,814
|
26,045
|
83,667
|
73,464
|
||||||||||||
Other segments: *
|
||||||||||||||||
Intersegment service revenues
|
2,229
|
2,595
|
9,678
|
7,637
|
||||||||||||
Operating revenues from external sources
|
3,925
|
2,052
|
8,518
|
6,394
|
||||||||||||
Total other segments
|
6,154
|
4,647
|
18,196
|
14,031
|
||||||||||||
Total business segments
|
1,048,554
|
945,975
|
3,093,900
|
2,726,727
|
||||||||||||
TSM operating revenues from external sources
|
130
|
100
|
392
|
355
|
||||||||||||
Elimination of intersegment premiums/service fees
|
(1,387
|
)
|
(574
|
)
|
(4,590
|
)
|
(4,636
|
)
|
||||||||
Elimination of intersegment service revenues
|
(2,229
|
)
|
(2,595
|
)
|
(9,678
|
)
|
(7,637
|
)
|
||||||||
Consolidated operating revenues
|
$
|
1,045,068
|
$
|
942,906
|
$
|
3,080,024
|
$
|
2,714,809
|
* |
Includes segments that are not required to be reported
separately, primarily the health clinics.
|
Three months ended
September 30,
|
Nine
months ended
September 30,
|
|||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Operating income (loss):
|
||||||||||||||||
Managed Care
|
$
|
8,532
|
$
|
13,006
|
$
|
34,496
|
$
|
56,495
|
||||||||
Life Insurance
|
5,591
|
5,682
|
17,772
|
20,188
|
||||||||||||
Property and Casualty insurance
|
1,975
|
4,386
|
7,763
|
10,921
|
||||||||||||
Other segments *
|
(2,161
|
)
|
(1,639
|
)
|
(6,593
|
)
|
(4,552
|
)
|
||||||||
Total business segments
|
13,937
|
21,435
|
53,438
|
83,052
|
||||||||||||
TSM operating revenues from external sources
|
130
|
100
|
392
|
355
|
||||||||||||
TSM unallocated operating expenses
|
(4,875
|
)
|
(1,633
|
)
|
(11,464
|
)
|
(4,877
|
)
|
||||||||
Elimination of TSM intersegment charges
|
2,403
|
2,403
|
7,209
|
7,209
|
||||||||||||
Consolidated operating income
|
11,595
|
22,305
|
49,575
|
85,739
|
||||||||||||
Consolidated net realized investment gains (losses)
|
1,015
|
507
|
3,746
|
(180
|
)
|
|||||||||||
Consolidated net unrealized investment (losses) gains on equity investments
|
(7,912
|
)
|
11,040
|
13,383
|
(17,428
|
)
|
||||||||||
Consolidated interest expense
|
(2,016
|
)
|
(2,096
|
)
|
(6,225
|
)
|
(5,813
|
)
|
||||||||
Consolidated other income, net
|
11,085
|
1,811
|
19,047
|
6,217
|
||||||||||||
Consolidated income before taxes
|
$
|
13,767
|
$
|
33,567
|
$
|
79,526
|
$
|
68,535
|
||||||||
|
||||||||||||||||
Depreciation and amortization expense:
|
||||||||||||||||
Managed Care
|
$
|
2,319
|
$
|
2,085
|
$
|
7,111
|
$
|
8,061
|
||||||||
Life Insurance
|
320
|
289
|
965
|
869
|
||||||||||||
Property and Casualty insurance
|
72
|
93
|
216
|
296
|
||||||||||||
Other segments*
|
355
|
240
|
1,057
|
913
|
||||||||||||
Total business segments
|
3,066
|
2,707
|
9,349
|
10,139
|
||||||||||||
TSM depreciation expense
|
488
|
404
|
1,318
|
716
|
||||||||||||
Consolidated depreciation and amortization expense
|
$
|
3,554
|
$
|
3,111
|
$
|
10,667
|
$
|
10,855
|
* |
Includes segments that are not required to be reported separately, primarily the health clinics.
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Assets:
|
||||||||
Managed Care
|
$
|
1,456,710
|
$
|
1,319,389
|
||||
Life Insurance
|
1,095,884
|
1,051,819
|
||||||
Property and Casualty Insurance
|
508,783
|
583,404
|
||||||
Other segments *
|
35,854
|
34,020
|
||||||
Total business segments
|
3,097,231
|
2,988,632
|
||||||
Unallocated amounts related to TSM:
|
||||||||
Cash, cash equivalents, and investments
|
16,945
|
16,489
|
||||||
Property and equipment, net
|
74,209
|
68,678
|
||||||
Other assets
|
90,257
|
88,684
|
||||||
|
181,411
|
173,851
|
||||||
Elimination entries-intersegment receivables and others
|
(86,976
|
)
|
(74,065
|
)
|
||||
Consolidated total assets
|
$
|
3,191,666
|
$
|
3,088,418
|
* |
Includes segments that are not required to be reported separately, primarily the health clinics.
|
16. |
Subsequent Events
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
As of September 30,
|
||||||||
2021
|
2020
|
|||||||
Managed Care enrollment:
|
||||||||
Commercial 1
|
416,033
|
429,503
|
||||||
Medicare
|
136,459
|
136,135
|
||||||
Medicaid
|
449,474
|
385,344
|
||||||
Total
|
1,001,966
|
950,982
|
||||||
Managed Care enrollment by funding arrangement:
|
||||||||
Fully insured
|
907,705
|
843,152
|
||||||
Self-insured
|
94,261
|
107,830
|
||||||
Total
|
1,001,966
|
950,982
|
(1) |
Commercial membership includes corporate accounts, self-funded employers, individual accounts, Medicare Supplement, Federal government employees and local government employees.
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
(dollar in millions)
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Revenues:
|
||||||||||||||||
Premiums earned, net
|
$
|
1,019.7
|
$
|
923.0
|
$
|
3,016.0
|
$
|
2,657.4
|
||||||||
Administrative service fees
|
3.9
|
3.7
|
9.3
|
8.7
|
||||||||||||
Net investment income
|
17.6
|
14.2
|
46.2
|
42.3
|
||||||||||||
Other operating revenues
|
3.8
|
2.0
|
8.5
|
6.4
|
||||||||||||
Total operating revenues
|
1,045.0
|
942.9
|
3,080.0
|
2,714.8
|
||||||||||||
Net realized investment gains (losses)
|
1.0
|
0.5
|
3.7
|
(0.2
|
)
|
|||||||||||
Net unrealized investment (losses) gains on equity investments
|
(7.9
|
)
|
11.1
|
13.4
|
(17.4
|
)
|
||||||||||
Other income, net
|
11.1
|
1.8
|
19.1
|
6.2
|
||||||||||||
Total revenues
|
1,049.2
|
956.3
|
3,116.2
|
2,703.4
|
||||||||||||
Benefits and expenses:
|
||||||||||||||||
Claims incurred
|
879.0
|
761.8
|
2,573.6
|
2,129.4
|
||||||||||||
Operating expenses
|
154.5
|
158.8
|
456.9
|
499.7
|
||||||||||||
Total operating expenses
|
1,033.5
|
920.6
|
3,030.5
|
2,629.1
|
||||||||||||
Interest expense
|
2.0
|
2.1
|
6.2
|
5.8
|
||||||||||||
Total benefits and expenses
|
1,035.5
|
922.7
|
3,036.7
|
2,634.9
|
||||||||||||
Income before taxes
|
13.7
|
33.6
|
79.5
|
68.5
|
||||||||||||
Income tax expense
|
5.6
|
10.0
|
24.5
|
27.5
|
||||||||||||
Net income attributable to TSM
|
$
|
8.1
|
$
|
23.6
|
$
|
55.0
|
$
|
41.0
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
(dollar in millions)
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Operating revenues:
|
||||||||||||||||
Medical premiums earned, net:
|
||||||||||||||||
Medicare
|
$
|
423.1
|
$
|
400.7
|
$
|
1,233.8
|
$
|
1,160.9
|
||||||||
Medicaid
|
302.2
|
240.9
|
916.7
|
682.9
|
||||||||||||
Commercial
|
214.4
|
208.4
|
631.0
|
605.3
|
||||||||||||
Medical premiums earned, net
|
939.7
|
850.0
|
2,781.5
|
2,449.1
|
||||||||||||
Administrative service fees
|
3.9
|
3.1
|
10.0
|
9.8
|
||||||||||||
Net investment income
|
8.1
|
5.1
|
19.1
|
14.8
|
||||||||||||
Total operating revenues
|
951.7
|
858.2
|
2,810.6
|
2,473.7
|
||||||||||||
Medical operating costs:
|
||||||||||||||||
Medical claims incurred
|
833.8
|
720.3
|
2,449.1
|
2,025.1
|
||||||||||||
Medical operating expenses
|
109.4
|
124.9
|
327.0
|
392.1
|
||||||||||||
Total medical operating costs
|
943.2
|
845.2
|
2,776.1
|
2,417.2
|
||||||||||||
Medical operating income
|
$
|
8.5
|
$
|
13.0
|
$
|
34.5
|
$
|
56.5
|
||||||||
Additional data:
|
||||||||||||||||
Member months enrollment:
|
||||||||||||||||
Commercial:
|
||||||||||||||||
Fully insured
|
966,002
|
966,906
|
2,871,788
|
2,920,460
|
||||||||||||
Self-funded
|
281,153
|
324,372
|
875,844
|
981,634
|
||||||||||||
Total commercial
|
1,247,155
|
1,291,278
|
3,747,632
|
3,902,094
|
||||||||||||
Medicare
|
410,939
|
407,170
|
1,228,732
|
1,220,280
|
||||||||||||
Medicaid
|
1,342,953
|
1,132,626
|
3,972,136
|
3,278,098
|
||||||||||||
Total member months
|
3,001,047
|
2,831,074
|
8,948,500
|
8,400,472
|
||||||||||||
Medical loss ratio
|
88.7
|
%
|
84.7
|
%
|
88.0
|
%
|
82.7
|
%
|
||||||||
Operating expense ratio
|
11.6
|
%
|
14.6
|
%
|
11.7
|
%
|
15.9
|
%
|
• |
Premiums generated by the Medicaid business increased by $61.3 million, or 25.4%, to $302.2 million, primarily reflecting an increase in enrollment of
approximately 210,000 member months and higher average premium rates. In addition, following a reconciliation process with ASES this quarter we recognized premiums corresponding to prior periods.
These increases were partially offset by the elimination of the HIP fee pass-through in 2021.
|
• |
Premiums generated by the Medicare business increased by $22.4 million, or 5.6%, to $423.1 million, primarily due to higher average premium rates resulting from an increase in the premium rate
benchmark, higher average membership risk score and higher enrollment of approximately 3,800 members months when compared with the prior-year period.
|
• |
Premiums generated by the Commercial business increased by $6.0 million, or 2.9%, to $214.4 million, primarily reflecting higher average premium rates. This increase was partially offset by the
elimination of the HIP Fee pass-through in 2021.
|
• |
Claims incurred in the Medicaid business increased by $61.2 million, or 27.1%, during the 2021 period. The MLR, at 95.2%, was 120 basis points higher than the same period last year. The increase in claims
cost is due to higher member months, a more normalized utilization of services compared to the lower utilization experienced in the prior-year quarter due to the pandemic, and COVID-19-related testing and treatment costs. In addition, the
2021 MLR was impacted by the elimination of the HIP fee pass-through in 2021.
|
• |
Claims incurred in the Medicare business increased by $26.1 million, or 8.1%, during the 2021 period and its MLR increased 190 basis points to 82.5%. These increases reflect a more normalized utilization of
services compared to the lower utilization experienced in the prior-year quarter due to the pandemic, improved benefits in the 2021 product offerings, COVID-19-related testing and treatment costs and the waiver of medical and payment
policies, partially offset by favorable prior period reserve development in the 2021 period.
|
• |
Claims incurred in the Commercial business increased by $26.2 million, or 15.3%, during 2021 and its MLR increased 1,000 basis points, to 91.9%. The higher MLR principally reflects higher claim trends, a
more normalized utilization of services compared to the low utilization experienced in the prior-year quarter due to the pandemic, COVID-19-related testing and treatment costs and the elimination of the HIP fee pass-through in 2021.
|
• |
Premiums generated by the Medicaid business increased by $233.8 million, or 34.2%, to $916.7 million, primarily reflecting higher average premium rates following
two premium rates increases that were effective in May 2020 and July 2020 and an increase in enrollment of approximately 694,000 member months. In addition, following a reconciliation process with ASES this year, we recognized premiums
corresponding to prior periods in the first and third quarter of 2021. These increases were partially offset by the elimination of the HIP fee pass-through in 2021.
|
• |
Premiums generated by the Medicare business increased by $72.9 million, or 6.3%, to $1,233.8 million, primarily due to higher average premium rates reflecting an increase in the premium rate benchmark and membership risk score. Member months increased by approximately 8,500 when compared with the prior-year period.
|
• |
Premiums generated by the Commercial business increased by $25.7 million, or 4.2%, to $631.0 million, mainly reflecting higher average premium rates in the 2021 period. This increase was
partially offset by the elimination of the HIP fee pass-through in 2021 and a decrease of approximately 49,000 fully insured member months.
|
• |
Claims incurred in the Medicaid business increased by $211.7 million, or 33.4%, during 2021 and its MLR decreased 60 basis points, to 92.1%. The increase in claim cost is due to higher member months. The
lower MLR reflects the premium rates increases and prior period premiums recognized this year, partially offset by COVID-19-related testing and treatment costs, the waiver of medical and payment policies and the elimination of the HIP fee
pass-through in 2021.
|
• |
Claims incurred in the Medicare business increased by $118.3 million, or 12.7%, during the 2021 period and its MLR increased 490 basis points, to 85.1%. The higher MLR reflects a more normalized utilization
of services compared to the low utilization experienced in the prior-year period due to the pandemic, improved benefits in the 2021 product offerings, COVID-19-related testing and treatment costs and the waiver of medical and payment
policies. These increases were partially offset by favorable prior period reserve development in the 2021 period.
|
• |
Claims incurred in the Commercial business increased by $94.0 million, or 20.4%, during 2021 and its MLR increased 1,180 basis points, to 87.9%. These increases primarily result from higher claim trends, a
more normalized utilization of services compared to low utilization in the prior year due to the pandemic, COVID-19-related testing and treatment costs, the waiver of medical and payment policies and the elimination of the HIP fee
pass-through in 2021.
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
(dollar in millions)
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Operating revenues:
|
||||||||||||||||
Premiums earned, net:
|
||||||||||||||||
Premiums earned
|
$
|
57.9
|
$
|
52.6
|
$
|
170.0
|
$
|
152.2
|
||||||||
Assumed earned premiums
|
-
|
0.1
|
-
|
0.1
|
||||||||||||
Ceded premiums earned
|
(2.8
|
)
|
(2.6
|
)
|
(8.4
|
)
|
(7.4
|
)
|
||||||||
Premiums earned, net
|
55.1
|
50.1
|
161.6
|
144.9
|
||||||||||||
Net investment income
|
6.8
|
6.9
|
19.9
|
20.6
|
||||||||||||
Total operating revenues
|
61.9
|
57.0
|
181.5
|
165.5
|
||||||||||||
Operating costs:
|
||||||||||||||||
Policy benefits and claims incurred
|
30.8
|
30.6
|
89.8
|
78.6
|
||||||||||||
Underwriting and other expenses
|
25.5
|
20.7
|
73.9
|
66.7
|
||||||||||||
Total operating costs
|
56.3
|
51.3
|
163.7
|
145.3
|
||||||||||||
Operating income
|
$
|
5.6
|
$
|
5.7
|
$
|
17.8
|
$
|
20.2
|
||||||||
Additional data:
|
||||||||||||||||
Loss ratio
|
55.9
|
%
|
61.1
|
%
|
55.6
|
%
|
54.2
|
%
|
||||||||
Operating expense ratio
|
46.3
|
%
|
41.3
|
%
|
45.7
|
%
|
46.0
|
%
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
(dollar in millions)
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Operating revenues:
|
||||||||||||||||
Premiums earned, net:
|
||||||||||||||||
Premiums written
|
$
|
46.0
|
$
|
44.0
|
$
|
123.8
|
$
|
115.6
|
||||||||
Premiums ceded
|
(14.8
|
)
|
(14.9
|
)
|
(44.2
|
)
|
(45.6
|
)
|
||||||||
Change in unearned premiums
|
(4.9
|
)
|
(5.2
|
)
|
(2.7
|
)
|
(3.1
|
)
|
||||||||
Premiums earned, net
|
26.3
|
23.9
|
76.9
|
66.9
|
||||||||||||
Net investment income
|
2.5
|
2.2
|
6.8
|
6.6
|
||||||||||||
Total operating revenues
|
28.8
|
26.1
|
83.7
|
73.5
|
||||||||||||
Operating costs:
|
||||||||||||||||
Claims incurred
|
13.5
|
10.4
|
34.6
|
27.8
|
||||||||||||
Underwriting and other expenses
|
13.3
|
11.3
|
41.3
|
34.8
|
||||||||||||
Total operating costs
|
26.8
|
21.7
|
75.9
|
62.6
|
||||||||||||
Operating income
|
$
|
2.0
|
$
|
4.4
|
$
|
7.8
|
$
|
10.9
|
||||||||
Additional data:
|
||||||||||||||||
Loss ratio
|
51.3
|
%
|
43.5
|
%
|
45.0
|
%
|
41.6
|
%
|
||||||||
Operating expense ratio
|
50.6
|
%
|
47.3
|
%
|
53.7
|
%
|
52.0
|
%
|
Nine months ended
September 30,
|
||||||||
(dollar in millions)
|
2021
|
2020
|
||||||
Sources (uses) of cash:
|
||||||||
Cash provided by operating activities
|
$
|
100.7
|
$
|
223.7
|
||||
Net purchases of investment securities
|
(63.2
|
)
|
(211.7
|
)
|
||||
Net capital expenditures
|
(16.9
|
)
|
(52.5
|
)
|
||||
Capital contribution on equity method investees
|
-
|
(7.1
|
)
|
|||||
Proceeds from long-term borrowings
|
-
|
30.9
|
||||||
Net change in short-term borrowings
|
(30.0
|
)
|
28.5
|
|||||
Payments of long-term borrowings
|
(3.4
|
)
|
(2.8
|
)
|
||||
Proceeds from policyholder deposits
|
12.6
|
21.6
|
||||||
Surrenders of policyholder deposits
|
(8.7
|
)
|
(12.8
|
)
|
||||
Repurchase and retirement of common stock
|
-
|
(14.9
|
)
|
|||||
Other
|
20.6
|
16.9
|
||||||
Net increase in cash and cash equivalents
|
$
|
11.7
|
$
|
19.8
|
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
(Dollar amounts in millions, except per share data)
|
Total Number
of Shares
Purchased (1)
|
Average
Price
Paid per
Share
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Programs
|
Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the
Programs
|
||||||||||||
July 1, 2021 to July 31, 2021
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||||
August 1, 2021 to August 31, 2021
|
-
|
-
|
-
|
-
|
||||||||||||
September 1, 2021 to September 30, 2021
|
2,063
|
21.90
|
-
|
-
|
Item 3. |
Defaults Upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Other Information
|
Item 6. |
Exhibits
|
Exhibits
|
Description
|
|
Amendment to the contract between Administración de Seguros de Salud de Puerto Rico (ASES) and Triple-S Salud, Inc., to administer the Provision of Physical & Behavioral Health
Services under the Provision of Physical and Behavioral Health Services Under the Government Health Plan dated as of September 9, 2021.
|
||
|
||
Amendment to the contract between Administración de Seguros de Salud de Puerto Rico (ASES) and Triple-S Salud, Inc., to administer the Provision of Physical & Behavioral Health
Services under the Provision of Physical and Behavioral Health Services Under the Government Health Plan dated as of September 29, 2021.
|
||
|
||
Statement re computation of per share earnings; an exhibit describing the computation of the earnings per share for the three and nine months ended September 30, 2021 and 2020 has been
omitted as the detail necessary to determine the computation of earnings per share can be clearly determined from the material contained in Part I of this Quarterly Report on Form 10-Q.
|
||
|
||
Certification of the President and Chief Executive Officer required by Rule 13a-14(a)/15d-14(a).
|
||
|
||
Certification of the Executive Vice President and Chief Financial Officer required by Rule 13a-14(a)/15d-14(a).
|
||
|
||
Certification of the President and Chief Executive Officer required pursuant to 18 U.S.C Section 1350.
|
||
|
||
Certification of the Executive Vice President and Chief Financial Officer required pursuant to 18 U.S.C Section 1350.
|
Triple-S Management Corporation
|
|||||
Registrant
|
|||||
Date:
|
November 4, 2021
|
By:
|
/s/ Roberto García-Rodríguez
|
||
Roberto García-Rodríguez
|
|||||
President and Chief Executive Officer
|
|||||
Date:
|
November 4, 2021
|
By:
|
/s/ Victor J. Haddock-Morales
|
||
Victor J. Haddock-Morales
|
|||||
Executive Vice President and Chief Financial Officer
|
1 Year Triple S Management Chart |
1 Month Triple S Management Chart |
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