‘Options Open’ For Potential Anthem Mergers, Acquisitions

Anthem says the company has outperformed financial expectations for nine consecutive quarters under Swedish's leadership.

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Two months after a proposed $54 billion merger fell apart with Cigna Corp. (NYSE: CI), the chief executive officer of Indianapolis-based Anthem Inc. (NYSE: ANTM) says the insurer will "keep options open" for other opportunities. During a conference call with investors Wednesday morning, Joe Swedish said "broadly-speaking," growth through M&A is still a significant long-term strategy. He used Anthem’s 2015 acquisition of Florida-based insurer Simply Healthcare Holdings Inc. as a prime example of a beneficial situation.

"We’re very mindful of the fact that scale does matter in this pursuit," Swedish said. "We will continue to very carefully examine the marketplace to assess our optionality, our targets and hopefully create fits that are really synergistic with respect to how we’re best going to serve the marketplace."

During the call following the release of Anthem’s second quarter earnings report, Swedish also discussed the changing landscape and continued uncertainty of the regulatory environment for the insurance industry. He said officials have been keeping tabs "by the hour" on what’s going on in Washington, which includes yesterday’s narrow approval in the Senate of a procedural move to go forward with potential repeal or adjustments of the Affordable Care Act and a subsequent proposal that was voted down hours later. Swedish believes stabilizing the insurance markets could be possible in the future and his team has suggested "ingredients" that could create regulatory fixes to so-called Obamacare. He says it’s still "anybody’s guess" about the form any potential changes will take.

"We’re very hopeful and we do believe that stabilization is a distinct possibility." Swedish added "obviously, as I’ve said, we’ll continue to make the necessary contributions for our voice to be heard as well as the voice of the industry overall."