CNC, Centene Corporation
Centene offers affordable and high-quality products to more than 1 in 15 individuals across the nation, including Medicaid and Medicare members as well as individuals and families served by the Health Insurance Marketplace.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- Revenue is Premium (98%) and Services (2%).
- Situation
- Unprofitable growth. no operating profit yet, judge it on revenue growth, gross-margin trajectory, cash burn and runway, never on an earnings multiple.
- What moves the needle
- Underwriting discipline and the float. What decides it: whether the combined ratio stays below 100% so the policies make money on their own, how large the float is against equity, and what that float earns once it is invested.
- Is it a good business?
- Claims run 364% of premiums, with underwriting costs on top. Book value per share, the measure Berkshire is judged on, has compounded about 9% a year across the record. The float runs about 1.0× equity, the leverage that magnifies both the underwriting and the investing. Whether the discipline holds through a soft market, and how the float is invested, are what the 10-K decides.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →Premium is 98% of revenue, so this is largely a single-line business.
- Premium98%$171.6B
- Services2%$3.0B
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $37.6B | $45.6B | $56.4B | $70.4B | $103.8B | $118.0B | $135.5B | $140.1B | $145.5B | $174.6B | $176.7B |
| Premiums earnedPremiums | $35.4B | $43.4B | — | — | — | — | — | — | — | — | $44.6B |
| Net incomeNet inc. | $562M | $828M | $900M | $1.3B | $1.8B | $1.3B | $1.2B | $2.7B | $3.3B | ($6.7B) | ($6.4B) |
| Loss ratioLoss | — | — | — | — | — | — | — | — | — | — | 357% |
| Return on equityROE | 10% | 12% | 8% | 11% | 7% | 5% | 5% | 10% | 13% | -33% | -30% |
| Float (reserves)Float | $3.9B | $4.3B | $6.8B | $7.5B | $12.4B | $14.2B | $16.7B | $18.0B | $18.3B | $20.5B | $20.6B |
| Book value / shareBVPS | $17.98 | $19.38 | $27.39 | $29.85 | $44.50 | $45.38 | $41.33 | $47.35 | $50.43 | $40.46 | $43.24 |
Owner’s Scorecard
Is it a good business?
- Loss ratio 364%Claims share of premiumsClaims incurred $157.7B ÷ premiums earned $43.4B
Claims as a share of premiums (the expense side was not cleanly tagged, so we show the loss ratio alone rather than a full combined ratio). Lower is better; the rest of underwriting cost sits on top of this.
- Return on equity −33%Loss on equityNet income ($6.7B) ÷ equity $20.0B
What it earns on shareholders' capital, the underwriting result plus what the float earns invested. Durably above the ~10% cost of equity is what compounds book value.
The float
- Float (reserves) $20.5B1.0× equityLoss and claim reserves $20.5B, 1.0× equity
Money collected as premiums and held against future claims, invested in the meantime. Buffett's insight was that good underwriting makes this float cost less than nothing, a pool of other people's money the owners earn on. The larger it is against equity, the more that leverage works, for better or worse.
- Not enough data
Net investment income wasn't found.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
Management & pay
Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- Stock-based compensation$204M
The slice of the business handed to employees in shares this year, 0% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
What the price implies
price / tangible bookAn insurer is worth a multiple of its tangible book value, and the multiple it deserves is set by the return it earns on that book. Type today’s price; we show what you would be paying against what Centene Corporation’s record justifies. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
The justified multiple is (return on tangible equity − growth) ÷ (cost of equity − growth). An insurer earning exactly its cost of equity is worth about one times tangible book; every point of durable excess return above that is worth paying up for. Raise the cost of equity and the justified multiple falls: that is interest-rate gravity on an insurer.
Tangible book $6.2B on 496M shares, a 54% normalized return on it. This is a lens, not a target. It assumes the insurer keeps earning that return; an underwriting cycle, a reserve shortfall or a bad year on the float changes it, which is what the record and the 10-K are for.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Pricing power & competitionRisk Factors
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“We operate in a highly competitive, dynamic and rapidly evolving industry and our failure to adapt could negatively impact our business.”
From the recordOperating margin−4.1% now (TTM), off a 3.4% peak (FY2016) - Concentrated dependenceRisk Factors
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“Our operations depend significantly on effective information systems and networks.”
From the recordOwner-earnings margin at stake (TTM)4% - Debt terms & refinancingMD&A
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“The credit agreement underlying our Revolving Credit Facility, in the principal amount of $4.0 billion, and Term Loan Facility, in the principal amount of $2.0 billion, contains customary covenants as well as financial covenants including a debt-to-capital ratio.”
From the recordBalance sheet (TTM)+$2.9B net cash · operating profit doesn't cover interest - Litigation & contingenciesRisk Factors
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“In addition, from time to time, we may be subject to class action or other lawsuits by healthcare providers with respect to claim payment procedures or similar matters.”
A judgment, not a number, weigh it against the filing yourself. - Regulation & policyBusiness
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“The Inflation Reduction Act (IRA) significantly changed Medicare Part D, impacting stand-alone Medicare PDPs as well as the Part D benefit in many of our Medicare Advantage plans beginning in 2025, most notably by eliminating the coverage gap and capping members' annual out-of-pocket costs at $2,000…”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “Intangible assets are amortized using the straight-line method over the following periods: Intangible Asset Amortization Period Purchased contract rights and customer relationships 5 - 15 years Provider contracts 4 - 15 years Trade names 7 - 20 years Developed technologies 2 - 5 years Goodwill is re…”
- “The premium deficiency reserve was increased to $270 million in the first quarter of 2025, to $389 million in the second quarter of 2025 and decreased by $107 million to $282 million in the third quarter of 2025 based on the progression of earnings during the year (with higher earnings at the beginn…”
- “During the year ended December 31, 2025, we recorded total impairment charges of $7.3 billion driven by a $6.7 billion goodwill impairment, $513 million Magellan Health impairment, $55 million intangible asset impairment related to the wind-down of certain contracts in the Other segment, and $20 mil…”
- “The increase was primarily driven by lower Marketplace estimated risk adjustment revenue, increased Marketplace medical costs, program changes in the PDP business as a result of the IRA and higher medical costs in Medicaid driven primarily by behavioral health, home health and high-cost drugs, parti…”
- “Also, member and provider behavior could continue to be influenced by the uncertainty surrounding the availability, affordability, funding and access to health insurance, whether under Medicaid programs or the Affordable Care Act (ACA) or the OBBBA, including due to the expiration of the Enhanced Ad…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Health insurance
The same industry, side by side on the underwriting lens, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Combined ratio | Loss ratio | ROE |
|---|---|---|---|---|
| UNHUnitedhealth Group Incorporated | $447.6B | — | 89% | 12% |
| CIThe Cigna Group | $274.9B | — | 85% | 14% |
| ELVElevance Health, Inc. | $199.1B | 117% | 90% | 13% |
| CNCCentene Corporation | $174.6B | — | 364% | -33% |
| HUMHumana Inc | $129.7B | 103% | 90% | 7% |
| AFLAflac Inc | $17.2B | 93% | 54% | 12% |