Company: ELV
Filing Date: 2025-10-21
Form Type: 10-Q
Source: 0001156039-25-000136
Chunk: 70

Company: Elevance Health, Inc.
Filing Date: 2025-10-21
Form: 10-Q
Item: Item 8
Chunk 70
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 well as a smaller contribution from faster than expected development of completion factors from the latter part of 2024. The favorable development recognized in the nine months ended September 30, 2024 resulted from favorable development in the completion factors resulting from the latter part of 2023 developing faster than expected as well as trend factors in late 2023 developing more favorably than originally expected.

The ratio of current year medical claims paid as a percent of current year net medical claims incurred was 86.3% and 85.4% for the nine months ended September 30, 2025 and 2024, respectively. This ratio serves as an indicator of claims processing speed whereby speed for claims payments was slightly faster during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

We calculate the percentage of prior year redundancies in the current period as a percent of prior year net medical claims payable less prior year redundancies in the current period in order to demonstrate the development of prior year reserves. For the nine months ended September 30, 2025, this metric was 8.9%, which was mainly driven by favorable trend factor development at the end of 2024, with favorable completion factor development from 2024 also contributing. For the nine months ended September 30, 2024, this metric was 11.3%, driven by both favorable completion factor development from 2023 and favorable trend factor development at the end of 2023.

We calculate the percentage of prior year redundancies in the current period as a percent of prior year net incurred medical claims to indicate the percentage of redundancy included in the preceding year calculation of current year net incurred medical claims. We believe this calculation supports the reasonableness of our prior year estimate of incurred medical claims and the consistency in our methodology. For the nine months ended September 30, 2025, this metric was 1.0%, which was calculated using the redundancy of $1,266. For the nine months ended September 30, 2024, the comparable metric was 1.3%, which was calculated using the redundancy of $1,610. We believe these metrics demonstrate an appropriate and consistent level of reserve conservatism.

Liquidity and Capital Resources

Sources and Uses of Capital

Our cash receipts result primarily from premiums, product revenue, service fees, investment income, proceeds from the sale or maturity of our investment securities, proceeds from business divestitures, proceeds from borrowings and proceeds