Investors are normally content to simply let health insurers invest their capital wisely. Companies like UnitedHealth Group
But these are extraordinary times. So Aetna
I have to say, the health insurer's capital structure is looking pretty healthy. Not every investment is at the same level as earlier in the year, but Aetna is far from being the next AIG
Aetna and Humana
Aetna has also lost some money on mortgage-backed securities, but that's really only a paper loss, and the company is still receiving interest payments as expected. Most importantly, most are from before 2006 when property values were still appreciating, so major losses shouldn't be expected even if the value of the securities has gone down.
The company expects to see earnings growth of 3% to 5% next year. While that's nothing to get excited about, Aetna is basically priced like there won't be any growth in the foreseeable future. If the company can wiggle through 2009 and avoid any major interruptions in business, it should be in good shape when the economy picks up.