Shares of pharmacy companies and health insurers came under pressure this week after Amazon.com Inc. announced it is launching an online store to sell and deliver prescription medications.
Insurance stocks underperformed the broader markets for the week ending Nov. 20, though both finished lower. The SNL Insurance Index dropped 2.07% to 1,159.94, while the S&P 500 lost 0.77% to close at 3,557.54.
The online retail giant said Amazon Pharmacy customers will have a profile where they input their insurance information, manage prescriptions and choose payment options. While publicly traded pharmacy companies took the brunt of the impact, managed care companies also fell this week.
Centene Corp. CEO Michael Neidorff said during an investor day presentation that he does not believe that the launch of Amazon Pharmacy would impact the company's membership base in any way. Nevertheless, Centene's stock was among the week's worst performers, falling 8.82%.
Cigna Corp.'s Inside Rx is partnering with Amazon on prescription discounts. That disclosure did not seem to be helpful to Cigna's shares, which were down 6.77%. UnitedHealth Group Inc., which also owns a major pharmacy benefits manager, lost 5.90%. Anthem Inc. slipped 8.21%, and Humana Inc. declined 6.27%.
Deal news also took center stage this week, including an agreement between Intact Financial Corp. and Tryg A/S to acquire RSA Insurance Group PLC in an all-cash deal for 685 pence per common share, representing a total consideration of about £7.2 billion.
Intact's shares were higher by 2.08% for the week.
MetLife Inc.'s shares picked up a bit of steam on the final trading day of the week after a report that Zurich Insurance Group AG is in "advanced talks" to strike a deal with the insurer to acquire its U.S. property and casualty business for about $4 billion.
MetLife's stock finished up 2.53%.
Several other major life insurers also recorded modest gains, including Aflac Inc., Prudential Financial Inc. and Voya Financial Inc.
Property and casualty companies were more mixed. Allstate Corp., which this week disclosed estimated pretax catastrophe losses of $345 million, or $273 million after tax, for October rose 3.59%. Travelers Cos. Inc. and Chubb Ltd. recorded very slight losses, while Progressive Corp. dropped 2.63%.