PacifiCare Health Systems Inc., moving to focus on improving profits in its core managed-care business, said Monday it has completed the sale of its money-losing workers' compensation insurance unit.
The Santa Ana health-maintenance giant sold its Great States Insurance subsidiary to HIH America Compensation & Liability Insurance Co. Inc. HIH America is a San Francisco-based unit of HIH Winterthur Insurance Group of Australia. Terms weren't disclosed.
Last summer, PacifiCare said its workers' compensation unit accounted for $29 million in annual revenue from insurance premiums, or less than 1% of its overall revenue.
PacifiCare is one of several big managed-care companies, including Foundation Health Systems and WellPoint Health Networks Inc., both in Woodland Hills, that have moved this year to divest unprofitable workers' compensation businesses. Jeff Green, an analyst at Sanford C. Bernstein in New York, said the companies have found it hard to make money in that marketplace because they're not used to managing issues such as fraud by workers or employers.
PacifiCare shares advanced $2.19, to $74.82, Monday on the New York Stock Exchange.