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.

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.