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Triple-S Management (NYSE:GTS)
Q1 2020 Earnings Call
May 07, 2020, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, and welcome to the Triple-S Management first-quarter 2020 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Garrett Edson, senior vice president, ICR. Please go ahead.

Garrett Edson -- Senior Vice President, ICR

Thank you, and good morning. Welcome to the Triple-S Management first-quarter 2020 earnings conference call. With us today are your host, Bobby Garcia, president and chief executive officer of Triple-S; and Juan Jose Roman, the executive vice president and chief financial officer. In addition, Madeline Hernandez, chief operating officer and president of managed care, will be available during Q&A.

By now, everyone should have access to the earnings announcement, which was released prior to this call, which may also be found on the company's website at triplesmanagement.com. Before we begin formal remarks, we need to remind everyone that each quarter, Triple-S management executives will provide their current view of the company's future and thus they will be sharing forward-looking information. These statements can be affected by risks and uncertainties involved in the business. Despite management's best efforts, actual results may differ materially from such forward-looking statements and what you hear in today's call.

These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. For further information on factors that could impact the company and the statements and projections contained herein, please refer to the safe harbor section in today's news release and the company's filings with the Securities and Exchange Commission. Each forward-looking statement and projection of financial information made during this call is based on information available to us as of the date of this call. We disclaim any obligation to update our forward-looking statements unless required by law.

In addition, this call is being webcast and an archived version will be available shortly after the call ends on the Investor Relations portion of the company's website at www.triplesmanagement.com. If you cannot download a copy of the release, you can contact us at (787) 792-6488, and we will get one to you immediately and can add you to the distribution list moving forward. With that, I'd now like to turn the call over to Bobby Garcia. Please go ahead.

Bobby Garcia -- President and Chief Executive Officer of Triple-S

Thanks, Garett, and good morning, everyone. The COVID-19 pandemic has dramatically affected every family, community and business around the globe. We all know someone who's been diagnosed, has lost a job or is risking his or her health as a first responder. And through the lockdowns, we have gained a much greater appreciation for our seniors, our homes, our livelihoods and our way of life.

We hope you're staying safe and healthy, and we very much appreciate you taking the time to join us this morning. Today, we reported total operating revenues of $896.4 million for the first quarter, a 13.8% increase from the prior year. On bottom line, we recorded adjusted net income of $17.7 million or $0.75 per diluted share, in line with the same quarter last year. Overall, we are pleased with the first quarter in which we experienced solid revenue growth across all segments, gaining membership in our Medicare and fully insured commercial businesses and supported our customers, employees, providers and communities through two 100-year events: January earthquakes and the coronavirus outbreak.

Like all of you, Puerto Rico has been grappling with the impact, implications and uncertainties caused by the pandemic over the past few months. That is why, first and foremost, we want to provide an update on the current status of the island and what effects we believe the pandemic will have on Triple-S as we navigate through this new and challenging environment. On March 15, Puerto Rico became one of the first jurisdictions in the United States to adopt a lockdown when our Governor ordered all but a few essential businesses to close and implemented an islandwide curfew and shelter-in-place restrictions effective that same day. While some restrictions have been lifted in recent weeks, it remains one of the most restrictive lockdowns in the U.S.

As a result, the public health impact of the coronavirus has been quite limited so far in Puerto Rico. As of yesterday, May 6, our health department has reported 1,968 positive cases of the virus and, sadly, 99 deaths. On the plus side, hospitals have not been overwhelmed with COVID-19 patients nor are they expected to be, based on current numbers and trends. Overall occupancy at hospitals, meaning for all patients, not just those diagnosed with COVID-19, is low.

Specifically, 48% of adult beds, 57% of ICU beds, 36% of negative pressure rooms and 25% of adult ventilators were reported in use as of yesterday. This means there is plenty of capacity in our hospital system if current trends were to change as Puerto Rico's economy reopens. As in many other places, the island has not tested widely for the virus. Focusing instead on those with symptoms nor has it implemented an effective contact tracing system.

Therefore, we do not have a clear picture of the virus' incidence on the island. However, we have observed other promising indications that its spread is under control. These are based on our own claims experience, interactions with the provider community, government statistics and a comparison of the virus' behavior in Puerto Rico with other jurisdictions that have historically experienced significant air travel and social ties to the island, such as New York, Florida, Texas, Illinois, Pennsylvania and the Dominican Republic. For example, as of yesterday, Triple-S has seen 874 suspected or confirmed COVID-19 diagnoses and 41 related hospitalizations within its membership.

The number of COVID-19 hospitalizations has been declining over the past two weeks as have patients placed in ICU wards and on ventilators. The number of deaths per 100,000 Puerto Rico residents is 3.1 compared with approximately 3.3 in Texas, seven in Florida, 25 in Pennsylvania and 129 in New York. Puerto Rico has 62 positive cases per 100,000 residents versus an estimated 119 in Texas, 176 in Florida, 421 in Pennsylvania and 1,689 in New York. While the number of tests performed in Puerto Rico at 397 per 100,000 residents is very low compared with the states I just mentioned, they are testing at a rate that is four to 10 times greater than ours.

The curve of reported positive cases and deaths on the island has flattened over the last few weeks. And the Puerto Rico government estimates that the virus peak between the end of April and this first week of May. Given these encouraging numbers, the governor has just begun lifting a number of restrictions on mobility while maintaining strict social distancing requirements and a number of industries are beginning to reopen this week. It's too early to assess the ultimate economic impact of the pandemic and lock down, however, the Puerto Rico government's 2020 fiscal plan, which was filed with a fiscal oversight board earlier this week and is pending certification, estimates that the pandemic will have an economic impact of approximately $5.7 billion between fiscal years 2020 and 2022.

To address this potential impact to the economy, Congress has assigned approximately $183 million in additional funds to Puerto Rico's Medicaid program and increased the FMAP from 76% to approximately 82% during the emergency. Through the Cares Act, it has also assigned $2.2 billion to the Governor of Puerto Rico to cover COVID-19 expenditures and has extended its relief and financial assistance measures to Puerto Rico residents and businesses. Meanwhile, the Puerto Rico government has approved a financial relief package of close to $1 billion. As a company, our business continuity and disaster recovery plans were put to the test in the aftermath of Hurricane Maria.

And we believe this helped us to be well prepared and our workforce to be quite resilient as it became clear that COVID-19 would become a pandemic. Since before the government shutdown, we began taking these steps to enable our employees to work from home while protecting the security of company data. And today, around 85% of 4,000 employees are working remotely. In our earnings release earlier this morning, we highlighted a number of other measures we have taken in response to the crisis, so I will not repeat them here.

I would like to mention however that we were able to quickly implement a number of initiatives such as the expansion of our nurse triage service and telehealth platforms, the launching of prescription drug home-delivery service and broad-based remote work, thanks to the strategic initiatives we have been making in technology and capabilities that are focused on the member experience. Likewise, the financial support the Triple-S foundation is providing to a number of community-based organizations to help feed our most vulnerable citizens, builds upon relationships we have developed with them over the last several years as part of our commitment to address social isolation and food and security in Puerto Rico. We're proud of our entire team and grateful for their hard work and commitment to our members, providers and the communities we serve, especially in these trying times. I'd like now to comment briefly on the near-term financial impact of the pandemic on Triple-S.

Toward the end of the first quarter, we began to see lower utilization as one would expect with a lock down. That has continued thus far in the second quarter as people defer elective procedures and routine care, but we expect a spike in utilization later this quarter or in the third quarter as people gain enough confidence to begin seeking medical services in outpatient and inpatient settings. We also expect utilization to rise as those with chronic conditions who have delayed necessary treatment experience a deterioration of their health. Given the environment, we expect to see a temporary increase in lapsed policies and payment deferrals, which will impact our membership roles and, ultimately, our top line.

We continue collecting premiums and are offering multiple ways for our members to pay, including mobile and electric fund transfers. For those members who are struggling, we also are providing grace periods. Longer-term impacts on our business will depend on the length of lock down, the behavior of the virus over time, the time it takes to develop antiviral medication and a vaccine and how these factors may impact the economy and, consequently, our commercial membership roles, the next open enrollment seasons and medical utilization. As a result of this uncertainty, the company has decided to suspend its 2020 premium and cost guidance until it has more visibility.

However, it is maintaining its full 2020 adjusted net income per diluted share guidance of between $2.60 and $2.80. Adjusted net income per diluted share, to remind you, does not account for any potential share repurchase activity during 2020 and assumes a weighted average diluted share count for full-year 2020 of 23.3 million shares. Just a couple of quick updates on the January earthquakes and Hurricane Maria. Regarding the earthquake, we recognized a $5 million charge related to the reinsurance deductibles in the first quarter of 2020, and we do not expect any additional losses related to the earthquake since we still expect our total exposure to the event to be less than 5% of our reinsurance program.

Separately, with respect to Hurricane Maria, we provided an update on P&C reserves and pending claims in our earnings release earlier this morning. There were no major developments in the first quarter, and we believe this segment remains adequately reserved to handle all remaining claims to date. Before I turn the call over to Juan Jose, a brief recap for the first quarter and our strategy for the near term. As noted on our prior call, we had a successful Medicare Advantage enrollment season at the end of 2019, increasing our membership count to nearly 136,000 members as of March 31 and leading to a near 17% increase in premiums earned.

We now maintain a 23% market share in MA, and we are focusing on facilitating more services during the pandemic to maintain membership satisfaction, heightened engagement and drive retention. Last month, CMS set the 2021 Medicare Advantage rate increase to 1.66%, and as a reminder, there will be no HIP fee in 2021, which will be a potential tailwind. Our fully insured commercial membership continued its upward trend with an increase of 25,000 member months in the first quarter on a year-over-year basis, resulting in a 1.3% increase in premiums over the same period last year. And our Medicaid business saw a significant rise in premiums earned due to a slight increase in member months from the prior-year period and a significant increase in per member month rates.

Summing up, the management team is focused on guiding the company through unprecedented public and economic crisis that are still unfolding at a global scale. While we complete key initiatives of our strategic plans that are both mission-critical to our current managed care business and foundational for the company's transition toward a value-based integrated care delivery system over the longer term. We are adapting our strategy in the short-term to address the potential business, operational and financial implications of the moment, but our vision is unchanged, to create value for all our stakeholders by providing seamless access to high-quality, affordable healthcare. I'll now ask Juan Jose to address our financial results.

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

Thank you, Bobby, and good morning to everyone on this call. I would like to echo Bobby's words and hope you are remaining safe and healthy through this unprecedented time. For the first quarter, we reported GAAP net loss per share of $1.12 and adjusted diluted net income per share of $0.75, compared to GAAP net income per share of $1.52 and adjusted net income per diluted share of $0.77 in the prior-year period. Let me now discuss the managed care segment results in detail.

Managed care premiums earned for the quarter rose $104 million or 14.8% over the same period last year, primarily reflecting increased membership in all line of business, higher average premium rates in the Medicare and Medicaid businesses and reinstatement of the HIP fee during 2020. The higher average premium rate in the Medicare business, primarily reflect an increase in the average member risk scores. Medicaid premiums increased due to the renegotiated rates of approximately 6% effective November 2019, the effect of the restatement of the HIP fee and higher premiums related to the high-cost, high-need members as a result of the reconciliation process we conducted with [Inaudible] over the past year. As expected, new sales slowed in the latter half of March and through the month of April as pay-at-home requirements post any in person sales efforts from our sales force agents and brokers.

We will continue to support sales and collection efforts by providing new or expanded digital channels. Managed care claims were up $88 million year over year mainly due to higher membership across all our businesses. The MLR at 83.7% was 10 basis points higher than last year, reflecting the increased benefits in our 2020 product offerings in the Medicare business and a favorable prior period reserve development in the 2019 period. The increase in MLR was partly offset by the effect of the HIP fee reinstatement in 2020 on the Medicaid and commercial loss ratio and a temporary drop in utilization during the last two weeks of the quarter due to the COVID-19 government enforced lockdown.

Specifically, during the last two weeks of March and through April, we have experienced a decline in utilization as members and providers began to defer non-emergent or elective health services. Drug services, on the other hand, were higher than usual of our members who refill their prescription to ensure they had adequate supply, while they stay -- required to stay at home. We expect to continue experiencing lower utilization in the second quarter, followed by a period of increased utilization once the lock down has been largely lifted and the demand from previously deferred non-emergent or elective procedures resumes while members in [Inaudible] team continue to receive services. Moving on to managed care segment quarterly operating expenses.

The segment operating expenses increased $23 million from a year ago, primarily reflecting the reinstatement in 2020 of the HIP Fee, which represents $16.3 million in the increase. Let me comment briefly on our life and property and casualty segments. Life premiums earned were up approximately 6% from the prior-year period, primarily reflecting premium growth across all lines of business and improved portfolio retention in the segment's individual line of business. The segment's operating income was $5 million, compared to $5.6 million in the prior-year period with the difference mostly due to higher amortization of deferred acquisition costs.

P&C net premiums earned were $21 million, $1 million higher than last year, reflecting increased sales in the commercial package and property products. The increase in sales was offset in part by approximately $3 million of reinsurance restatement premiums following the losses recorded after the earthquake experienced in the Southwest region of Puerto Rico in January 2020. The segment operating loss this quarter was $0.2 million, compared to operating income of $3.6 million during the same quarter last year mostly due to a recognition of $5 million of earthquake loss after the January 2020 event and the previously mentioned $3 million reinsurance repayment premium. These increases were partially offset by better loss experience in the segment regular businesses.

Returning to our overall results, consolidated income tax benefit of $9.7 million resulted from the net unrealized investment losses on equity investments in the first quarter of 2020. Total cash and investments at the [Inaudible] company level were $24 million as of January 31, 2020. Let me talk a bit more about our consolidated balance sheet. Our investments represent about 56% of our total assets.

The main goal of our investment portfolio are capital and liquidity preservation, which are reflected in our conservative asset allocation. Our portfolio consists roughly of 76% high-quality fixed income positions and 24 equity and equity-like investments. Within core fixed income, all bonds are investment-grade and are average of very high quality. Our main positions are agency mortgage and U.S.

municipals. Our positions has performed relatively well, and we have no individual credit concerns regarding any of our positions. Within our risk bucket, we own mutual funds that provide us broad public-market exposures, which means less concern about individual credit issues. We also hold certain private investments for other diversification and income.

As an illustration of the quality of our portfolio and its conservative asset allocation, the total return of our portfolio was negative 1.4% for the first quarter despite the massive market dislocation in March. Regarding liquidity, at the end of last year, our subsidiaries, Triple-S Salud and Triple-S Vida became members of the Federal Home Loan Bank of New York and can access short-term borrowing facilities up to 30% of the remitted assets, depending on the amount of collateral held at the current home loan bank. As of April 30, 2020, the borrowing capacity for Triple-S Salud and Triple-S Vida were $121 million and $103 million, respectively. In addition, Triple-S Advantage has an unused $10 million revolver credit for unexpected overdraft.

In addition to access to cash provided by these facilities, we expect our portfolio will generate approximately $130 million in 2020 in cash flow through income and maturities. Based on the above, we believe the company liquidity is ample and can support our operations during the COVID-19 pandemic. Under the company share repurchase program during the first quarter of 2020, 577,447 shares were repurchased at an aggregate cost of $9 million. As of May 6, $2.5 million remain available for repurchase under the program.

As Bobby mentioned, we will continue to support our members, community, employees and providers, we will be there for them through the pandemic and lockdown. We hope you continue to stay safe and healthy in these unprecedented times. We will now proceed to our Q&A section. Operator, please open the call for questions.

Questions & Answers:


Operator

Thank you. [Operator instructions] We will now take the first question. Please go ahead, caller from Peter Costa from Wells Fargo. Please go ahead.

Peter Costa -- Wells Fargo Securities -- Analyst

Good morning, everyone, and thank you for all you are doing for the COVID patients out there and the situation with the pandemic. I guess my first question, I'll start with the tax rate a little bit. Can you help me understand your tax rate relative to the operating part of your business versus the unrealized losses?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

Hi, Peter. Good morning. This is Juan Jose. Yes, mostly what it is reflecting in this quarter is that -- as a reminder, we file income tax returns by individual companies.

And the unrealized losses that, for GAAP purposes, flow through the P&L create, in this case, a deferred tax asset. And that's why we have -- combined with other items within our calculation for taxes is how we need to -- that is why so high -- asset for the percentage is higher than usual.

Peter Costa -- Wells Fargo Securities -- Analyst

But on the operating part of the business, it looks like the tax rate is lower. Is that clear?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

No.

Bobby Garcia -- President and Chief Executive Officer of Triple-S

Peter, for some reason, you sound quite muffled. And our apologies, but if you could repeat the question and maybe move the phone a bit.

Peter Costa -- Wells Fargo Securities -- Analyst

Sure. Hopefully, this time, it is a little bit better.

Bobby Garcia -- President and Chief Executive Officer of Triple-S

Yes.

Peter Costa -- Wells Fargo Securities -- Analyst

It looks like your tax rate is a little bit lower on the operating part of the business than normal. Can you explain what happened there?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

I have to check that, Peter. During this quarter -- well, it could be the combination that in this quarter, for example, on the P&C company, excluding the impact of unrealized gain and losses, still, we have a loss as compared to last year. Then that made a significant change as compared to last year where the tax was an expense of 30%. However, this year was basically flat at just 0.2%.

So the tax rate is significantly lower for that legal entity. So yes, that's the reason, Peter. In terms of the operation, it is dependent on the company that how it changed versus last year.

Peter Costa -- Wells Fargo Securities -- Analyst

Right. And then can you, perhaps, talk a little bit about the volume of procedure decline that we saw in the last two weeks of March versus what it was in April and then how you see that progressing going forward? If you could quantify the utilization drop a little bit for us.

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

Yeah. So we noticed most of the decrease in March started in the third week, and it increased in the fourth week. Overall, we saw around 14% to 20% for those two weeks, that's compared to -- expectation as compared to last year. In the month of April, it accelerated, and we're seeing the number of claims received are lower for about 50%.

And that probably will continue for the first week of May. We, as Bobby mentioned, just started to reopen a little bit, and we're starting to get a report from the hospitals that the admissions are starting to increase, still lower than average, but they are starting to see admissions to increase because the requirement to avoid any elective surgery was eliminated effective this week. So 50% April. First week of May, kind of the same, although this would mean -- this would be starting on Monday.

There is a slight increase in admissions at the hospitals.

Peter Costa -- Wells Fargo Securities -- Analyst

So 14% to 20% in the last two weeks of March and then 50% down in April, and those are on number of claims. Or is that on dollar value of the claims?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

Number of claims received, not -- number of claims received.

Peter Costa -- Wells Fargo Securities -- Analyst

And what would that be in dollar value?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

Peter, I don't have it in front of me, but most probably, we'll be very close to that number also.

Peter Costa -- Wells Fargo Securities -- Analyst

OK. Can we talk about the impact on the quarter in terms of MLR on week day, as well as on the health insurance fee?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

The health insurance fee, the impact in expenses was $16.3 million of incremental cost. Of that, we did get reimbursed in detail, but I think the Medicaid for it shows as an increase in premium also. And commercial will pass through the premium rate increases. So it is around $6.3 million that was the impact in the quarter.

Peter Costa -- Wells Fargo Securities -- Analyst

$6.3 million, you said?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

16, 1-6, yes.

Peter Costa -- Wells Fargo Securities -- Analyst

Yes. OK. But all of the impact on the medical loss ratio itself because you need to reimburse for everything. And in terms of the Medicaid -- I'm sorry, the Medicare side of your business?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

It's around 90 basis points.

Peter Costa -- Wells Fargo Securities -- Analyst

90 basis points. OK. And then what was the impact on from weekday?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

Peter, I'm sorry, the impact from what?

Peter Costa -- Wells Fargo Securities -- Analyst

It's a leap year, so maybe the extra day came from...

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

Not that significant. Yes. Peter, it was not that significant because -- yes, we look into it, but it was not that material, only couple of million dollars. It doesn't look like it was much at all.

Peter Costa -- Wells Fargo Securities -- Analyst

OK. And you talked about the relief money that Puerto Rico is receiving, but you didn't talk about if you received any yourselves. Did you receive any of that relief funding that Puerto Rico got? No?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

No.

Peter Costa -- Wells Fargo Securities -- Analyst

Do you expect to?

Bobby Garcia -- President and Chief Executive Officer of Triple-S

We do not expect to request it.

Peter Costa -- Wells Fargo Securities -- Analyst

OK. And then let's move on to the P&C business. It looks like that moved a little bit, it's almost backwards this year. So I guess isn't that -- this quarter.

I guess that isn't surprising given the courts have probably shut downed to some extent because of the COVID situation. Is that delaying the processing of things at this point? And how should we expect you to proceed in terms of cleaning up some of the remaining claims there?

Bobby Garcia -- President and Chief Executive Officer of Triple-S

Yes. Peter, this is Bobby. You're right. The courts have been closed, and so that does delay what, as you know, is already a slow court system here in Puerto Rico.

On the other hand, we've continued because we've been open to reach out and work with clients and their representatives to try to close cases as best they can given the circumstances. And what we have seen, although it's in the month of April, is a decrease from the number we provided. I think it was 648 down to 601 in the month of April. And we have seen good progress in April.

And those cases have been settled, not through the quarters, but settled through private negotiations for amounts that are in line with reserves.

Peter Costa -- Wells Fargo Securities -- Analyst

Good progress. I guess I'll get back in the queue, so you can move on to somebody else. Thank you.

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

Thank you.

Bobby Garcia -- President and Chief Executive Officer of Triple-S

Thank you, Peter.

Operator

Thank you. [Operator instructions] We will now take a follow-up question from Peter Costa from Wells Fargo. Please go ahead.

Peter Costa -- Wells Fargo Securities -- Analyst

Can you talk about -- going back to the P&C business again, do you have any incurred but not reported reserves at this point in time? Or is it all allocated for specific claims in terms of -- I think you've about $222 million left or so right now in terms of reserves that haven't been paid out.

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

Yes. Peter, we still have around $1 million for -- again, [Inaudible] as what we've said, is getting lower and lower every day. April, we just received one claim.

Peter Costa -- Wells Fargo Securities -- Analyst

OK. All right. And then you get cash at the parent of $9 million. That's a little bit lower than it usually is for you guys.

Can you talk about whether you expect that to stay at that level? Or is that particularly low for some of -- any particular reason?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

Not necessarily. We manage that as -- based on different needs. During this quarter, we have part of the buybacks, as well as some investments in our clinics, so that is mostly the use of the cash flow. But as we go, obviously, we will pay dividend up from our subsidiaries as necessary.

Peter Costa -- Wells Fargo Securities -- Analyst

OK. And then my last question is just on Medicaid rates. It looks like you recovered some of the money in this quarter. So the MLR came down from that 100% that it was in the fourth quarter.

But it still isn't really at the 92% that it's supposed to be. Do you expect that to continue lower? Or is there still a lot of work to be done there?

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

There's still work to be done. So although we accelerated significantly, the reconciliation process, that continues. So it's not done. We'll recognize much better process right now.

MLR, our target is being more closer as we court to contract variety that is at that 92%. That's what we are targeting for the remainder of the year.

Peter Costa -- Wells Fargo Securities -- Analyst

OK. And just, I guess, one follow-up on that. One of your competitors just talked about selling their Medicaid business in Puerto Rico. What are your thoughts on that? Will that improve your situation, or will you be interested in buying that? Or would you be able to buy anything in that, or would that be a problem?

Bobby Garcia -- President and Chief Executive Officer of Triple-S

Peter, this is Bobby again. What we heard them say to the market last week is that they were exiting the market. And so there are specific plans with respect to that exit up to them and assess the Puerto Rico Health Insurance Administration to determine how it would take place. Bear in mind that this is not at the end of the contract.

So it is a process that -- my understanding, assess has not gone through before with the exception of the exit of another competitor back in -- I believe it was 2011. So it's somewhat of a different situation because of the change in the nature of the program, where you have multiple competitors across the island. To your question of whether we would be interested. We don't talk about potential transactions.

But at this point, we are always looking at options.

Peter Costa -- Wells Fargo Securities -- Analyst

Thank you so much.

Operator

Thank you. That concludes today's question-and-answer session. I would now like to turn the conference back to Bobby for any additional or closing remarks.

Bobby Garcia -- President and Chief Executive Officer of Triple-S

Thank you, operator. Just to say, once again, how proud I am with the work and efforts of the entire Triple-S team to aid our members throughout this unprecedented time. We are making a difference. And looking ahead, we'll continue to do everything we can to help our members and employees throughout this ordeal while we doggedly build a healthcare delivery system that is patient-centered and committed to quality outcomes.

Thank you again for your time and ongoing support. We hope you and your families remain safe and healthy. Please reach out to us if you have any more questions and have a great day.

Operator

[Operator signoff]

Duration: 39 minutes

Call participants:

Garrett Edson -- Senior Vice President, ICR

Bobby Garcia -- President and Chief Executive Officer of Triple-S

Juan Jose Roman -- Executive Vice President and Chief Financial Officer

Peter Costa -- Wells Fargo Securities -- Analyst

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