| Despite fears that insurers face potentially
crippling claims in the wake of the Sept. 11 terrorist attacks, Anthem
Inc. made its debut as a stockholder-owned company with an initial
public offering (IPO) that raised $1.7 billion.
| "Insurance — health insurance especially — is viewed as a staple of life in both good and bad times." |
The
Indiana-based health insurer sold 48 million shares, 70 percent more
than the company had originally planned. Goldman Sachs Group, the IPO's
underwriter, had to scramble twice at the last minute to add 19 million
shares to the deal to satiate investor demand for the stock. Trading
under the ticker symbol "ATH," shares of Anthem's stock opened at
$40.50 on Oct. 30, 2001, 12.5 percent above the IPO price of $36 per
share. In addition to the shares sold in the IPO, an estimated 55
million shares of Anthem's common stock will be distributed to Anthem
members under the company's demutualization plan.
Anthem's IPO marks the end of the company's conversion from a mutual insurance
company, owned by the its policyholders, to a publicly traded company,
owned by shareholders. Anthem's IPO was the second $1 billion-plus IPO
since the Sept. 11 terrorist attacks. Last week, Principal Financial
Group raised $1.8 billion during its IPO. According to market analysts,
the insurers' strong showings indicate that investors are lining up to
purchase insurance stocks that have traditionally been viewed as stable
during times of economic recession.
"People are more
comfortable investing with companies that have been around a long time
and most insurers have been around a long time," says Joe Luchok,
spokesperson for the Health Insurance Association of America.
"Insurance — health insurance
especially — is viewed as a staple of life in both good and bad times.
Most everyone has insurance and people like to invest in what they
know."
Anthem provides health insurance benefits to
nearly 8 million members and is the Blue Cross and Blue Shield licensee
for Colorado, Connecticut, Indiana, Kentucky, Ohio, Maine, Nevada, and
New Hampshire. The Anthem Blue Cross and Blue Shield companies are
independent licensees of the Blue Cross and Blue Shield Association.
Anthem has repeatedly said that its demutualization will not affect
health insurance premiums.
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