8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 9, 2010

TRIPLE-S MANAGEMENT CORPORATION

(Exact Name of Registrant as Specified in Charter)

Puerto Rico
(State or Other Jurisdiction of Incorporation) 001-33865
(Commission File Number) 66-0555678
(IRS Employer Identification
No.)

Registrant’s telephone number, including area code: 787-749-4949

1441 F.D. Roosevelt Avenue, San Juan, Puerto Rico 00920
(Address of Principal Executive Offices and Zip Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

Item 2.02. Results of Operations and Financial Condition

On February 9, 2010, Triple-S Management Corporation issued a press release announcing its Exhibit 99.1 to this report.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits

     (d) The following items are filed as exhibits to this report:

99.1 Press release, dated February 9, 2010 issued by Triple-S Management Corporation     

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TRIPLE-S MANAGEMENT CORPORATION
Date: February 9, 2010	By:	/s/ Ramón M. Ruiz-Comas
		Name:	Ramón M. Ruiz-Comas
		Title:	President & Chief Executive Officer

EX-99.1

Exhibit 99.1

Triple-S Management Corporation
1441 F.D. Roosevelt Ave.
San Juan, PR 00920
www.triplesmanagement.com

FOR FURTHER INFORMATION:

AT THE COMPANY:	INVESTOR RELATIONS:
Juan-José Román Finance Vice President & CFO (787) 749-4949	Kathy Waller (312) 543-6708

Triple-S Management Corporation Reports Fourth Quarter 2009 Results

SAN JUAN, Puerto Rico, February 9, 2010 — Triple-S Management Corporation (NYSE:GTS), the largest managed care company in Puerto Rico, today announced consolidated revenues of $516.9 million and operating income of $34.2 million for the three months ended December 31, 2009. Net income of $28.1 million, or $0.96 per diluted share, includes an after tax net gain of $3.7 million, or $0.13 per share, in net realized and unrealized gains on investments and derivatives.

Fourth-Quarter Consolidated Highlights

• Total consolidated operating revenues increased 11.2% year over year to $511.8 million;

• Operating income was $34.2 million;

• Excluding net realized and unrealized gains on investments and a derivatives gain; included within other income (expenses), net income was $24.4 million, or $0.83 per diluted share;

• Consolidated loss ratio was 84.7% and the medical loss ratio (MLR) was 88.7%;

• Consolidated operating expense ratio decreased 70 basis points to 14.3%;

• Commercial member months enrollment, including ASO, increased 19.0%;

“We recorded solid membership growth in the fourth quarter, specifically in the Commercial business, which largely reflected the July 2009 acquisition of La Cruz Azul (LCA),” said Ramón M. Ruiz-Comas, President and Chief Executive Officer. “In the quarter, we also benefitted from the favorable impact of ASO government contract profit sharing in the Metro-North region, offset by costs related to swine flu, primarily in our Commercial segment. As we concluded our second year as a public company, our balance sheet remains healthy.”

Ruiz-Comas added, “Importantly, we enter 2010 with a well-balanced revenue stream, enabling us to diversify risk and insulate ourselves from the variability that can occur in our businesses. We have put in place several initiatives aimed at lowering our MLR while preserving quality of care, and anticipate that we will begin the migration of an initial set of members onto our new IT system beginning in April. We continue to evaluate opportunities to expand our geographic footprint within Puerto Rico, the Caribbean and Central America, and remain confident in our competitive position and our ability to execute the strategy we have outlined.”

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Selected Fourth Quarter Details

• Consolidated Premiums Increased 9.4%. Consolidated premiums were $479.9 million, an increase of 9.4% versus a year ago, principally due to increased volume and higher rates in the Managed Care business. Reported Managed Care net premiums increased to $432.1 million driven by an 18.0% year over year rise in Commercial premiums. The increase resulted primarily from growth in Commercial membership, reflecting in large part the acquisition of LCA, as well as higher premium rates across all businesses.

• Administrative Service Fees Rose 162.0%. Administrative service fees increased $11.5 million, to $18.7 million, reflecting Metro-North region members added in November 2008, the LCA acquisition, which added 72,000 members, and organic growth. In addition, as the result of the savings achieved in the Metro-North region, we recognized a higher than anticipated performance incentive.

• Consolidated Operating Margins Improved to 6.7%. As a result of a 100 basis point improvement in Managed Care margins, consolidated operating margins increased by 40 basis points to 6.7%. Offsetting this improvement in the Managed Care margins were respective year over year declines of 160 and 410 basis points in the Life Insurance and Property and Casualty businesses.

• Managed Care Membership Increased 12.7%. Total Commercial membership was 737,286, up 24.4% from the prior year, primarily reflecting the addition of LCA members and other organic growth. Reform membership rose 2.4% to 540,142 and Medicare membership declined 7.5% to 69,605.

• Consolidated Claims Incurred Increased 11.5%. Consolidated claims incurred were $406.3 million, an 11.5% increase from a year ago, principally due to higher claims in the Managed Care segment resulting from higher enrollment and the addition of LCA’s members. The consolidated loss ratio rose to 84.7%, largely reflecting the effect of reserve developments in our Managed Care segment and the impact of premium adjustments in the Reform business. Excluding the effect of these items, the consolidated loss ratio increased 140 basis points, primarily resulting from increased utilization, particularly among local government employees, and the effect of the swine flu.

• Managed Care MLR Improved 160 Basis Points Sequentially to 88.7%. The quarter-to-quarter improvement was driven by a decrease in the Medicare MLR, and to a lesser degree in the Commercial MLR, offset in part by an increase in the Reform MLR.

• Consolidated Operating Expense Ratio Fell 70 Basis Points, to 14.3%. The decline in this ratio was achieved despite a 6.6% increase in operating expenses, reflecting efficiencies associated with our scalable infrastructure and general cost control discipline. Overall, operating expenses increased $4.4 million, to $71.3 million, primarily due to higher Commercial volume, incremental expenses associated with the LCA acquisition, and the addition of the Metro-North region ASO contract in November 2008.

• Adjusted Net Income Rose to $24.4 million, or $0.83 Per Diluted Share. This compares with $21.3 million, or $0.66 per diluted share, in the corresponding quarter of 2008. Net income for the three months ended December 31, 2009, was $28.1 million, or $0.96 per diluted share, which included $0.13 per diluted share in after tax net realized and unrealized gains on investments.

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	Pro Forma Net Income
	Three months ended					Year ended
(Unaudited)	December 31,					December 31,
(dollar amounts in millions)	2009			2008		2009			2008
Pro forma net income:
Net income	$	28.1		$	2.0	$	68.8		$	24.8
Net realized investment (gains) losses, net of tax		(1.5	)		9.9		(0.5	)		11.8
Net unrealized trading investments (gains) losses, net of tax		(2.1	)		8.7		(8.9	)		18.8
Derivative loss, net of tax		(0.1	)		0.7		—			4.4
Pro forma net income	$	24.4		$	21.3	$	59.4		$	59.8
Diluted pro forma net income per share	$	0.83		$	0.66	$	2.01		$	1.86

Year-End Recap

For the year ended December 31, 2009, consolidated operating revenues rose 11.6% to $2.0 billion, primarily reflecting growth in the Managed Care segment. Consolidated claims incurred for the year ended December 31, 2009 were $1.61 billion, up 12.4% year over year. The consolidated loss ratio increased 140 basis points to 86.0%. Consolidated operating expenses for the period were $279.4 million and the operating expense ratio was 14.5%. Pro forma net income for the year ended December 31, 2009 was $59.4 million, or $2.01 per diluted share, based on weighted average shares outstanding of 29.6 million, compared with $59.8 million, or $1.86 per diluted share, based on weighted average shares outstanding of 32.2 million at the same time last year.

As of December 31, 2009, Triple-S Management had $39.0 million in parent company cash, cash equivalents, and investments.

Segment Performance

Triple-S Management operates in three segments: 1) Managed Care, 2) Life Insurance, and 3) Property and Casualty Insurance. Management evaluates performance based primarily on the operating revenues and operating income of each segment. Operating revenues include premiums earned, net administrative service fees and net investment income. Operating costs include claims incurred and operating expenses. The Company calculates operating income or loss as operating revenues minus operating expenses. Operating margin is defined as operating gain or loss divided by operating revenues.

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	Three months ended December 31,									Year ended December 31,
(Unaudited)							Percentage									Percentage
(dollar amounts in millions)	2009			2008			Change			2009			2008			Change
Premiums earned, net:
Managed Care:
Commercial	$	221.9		$	188.1			18.0	%	$	822.1		$	734.2			12.0	%
Reform		90.4			87.8			3.0	%		348.1			340.1			2.4	%
Medicare		119.8			115.1			4.1	%		513.9			438.7			17.1	%
Total managed care		432.1			391.0			10.5	%		1,684.1			1,513.0			11.3	%
Life Insurance		25.6			24.2			5.8	%		100.1			92.8			7.9	%
Property and Casualty		23.2			24.5			(5.3	%)		96.2			93.8			2.6	%
Other		(1.0	)		(1.0	)		0.0	%		(4.3	)		(4.1	)		4.9	%
Total premiums earned	$	479.9		$	438.7			9.4	%	$	1,876.1		$	1,695.5			10.7	%
Operating revenues:
Managed Care	$	457.1		$	404.4			13.0	%	$	1,757.0		$	1,558.6			12.7	%
Life Insurance		29.9			28.6			4.5	%		116.9			109.3			7.0	%
Property and Casualty		26.1			28.1			(7.1	%)		107.9			106.3			1.5	%
Other		(1.3	)		(0.9	)		44.4	%		(5.0	)		(3.3	)		51.5	%
Total operating revenues	$	511.8		$	460.2			11.2	%	$	1,976.8		$	1,770.9			11.6	%
Operating income:
Managed Care	$	25.1		$	18.2			37.9	%	$	57.2		$	52.6			8.7	%
Life Insurance		3.6			3.9			(7.7	%)		14.6			12.5			16.8	%
Property and Casualty		4.4			5.9			(25.4	%)		8.8			13.1			(32.8	%)
Other		1.1			1.0			10.0	%		4.0			5.9			(32.2	%)
Total operating income	$	34.2		$	29.0			17.9	%	$	84.6		$	84.1			0.6	%
Operating margin:
Managed Care		5.5	%		4.5	%	100		bp		3.3	%		3.4	%	-10		bp
Life Insurance		12.0	%		13.6	%	-160		bp		12.5	%		11.4	%	110		bp
Property and Casualty		16.9	%		21.0	%	-410		bp		8.2	%		12.3	%	-410		bp
Consolidated		6.7	%		6.3	%	40		bp		4.3	%		4.7	%	-40		bp
Depreciation and amortization expense	$	3.3		$	2.1			57.1	%	$	9.6		$	7.4			29.7	%

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	Three months ended						Year ended
Managed Care Additional Data	December 31,						December 31,
(dollar amounts in millions)	2009			2008			2009			2008
Member months enrollment
Commercial:
Fully-insured		1,443,808			1,249,569			5,421,586			4,947,854
Self-funded		771,039			526,616			2,726,036			2,049,140
Total Commercial		2,214,847			1,776,185			8,147,622			6,996,994
Reform:
Fully-insured		1,018,532			1,012,521			4,016,332			4,101,905
Self-funded		597,576			376,975			2,321,144			376,975
Total Reform		1,616,108			1,389,496			6,337,476			4,478,880
Medicare:
Medicare Advantage		177,227			196,879			742,666			727,274
Stand-alone PDP		29,399			30,284			117,700			127,658
Total Medicare		206,626			227,163			860,366			854,932
Total member months		4,037,581			3,392,844			15,345,464			12,330,806
Claim liabilities							$	236.4		$	201.8
Days claim payable								56.9			54.9
Premium PMPM:
Managed care	$	161.90		$	157.08		$	163.53		$	152.76
Commercial	$	153.69		$	150.53		$	151.63		$	148.39
Reform	$	88.76		$	86.71		$	86.67		$	82.91
Medicare	$	579.79		$	506.68		$	597.30		$	513.14
Consolidated loss ratio		84.7	%		83.0	%		86.0	%		84.6	%
Medical loss ratio		88.7	%		87.6	%		90.0	%		88.9	%
Commercial		89.1	%		89.3	%		90.4	%		87.6	%
Reform		97.2	%		87.7	%		91.8	%		90.6	%
Medicare Advantage		81.9	%		85.1	%		88.2	%		89.3	%
Medicare Part D		69.3	%		67.0	%		86.4	%		107.4	%
Consolidated operating expense ratio		14.3	%		15.0	%		14.5	%		14.7	%
Operating expense ratio		10.8	%		10.9	%		10.6	%		10.5	%

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	As of December 31,
Managed Care Membership by Segment	2009		2008
Members:
Commercial:
Fully-insured		480,671		417,685
Self-funded		256,615		175,038
Total Commercial		737,286		592,723
Reform:
Fully-insured		340,453		337,960
Self-funded		199,689		189,487
Total Reform		540,142		527,447
Medicare:
Medicare Advantage		59,825		65,243
PDP		9,780		10,037
Total Medicare		69,605		75,280
Total members		1,347,033		1,195,450

2010 EPS Guidance

“At the midpoint of our 2010 per share earnings guidance of $2.05-$2.15, we are forecasting a 4% increase in operating revenues and growth of twice that in operating income, reflecting a 100 basis point decline in MLR” said Ruiz-Comas.

	2010 Range
Medical enrollment fully-insured (member months)	10.4-10.8 million
Medical enrollment self-insured (member months)	5.3-5.5 million

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	2010 Range
Consolidated operating revenues (in billions)	$	2.0-$2.1
Consolidated loss ratio		84.6%-85.6	%
Medical loss ratio		88.5%-89.5	%
Consolidated operating expense ratio		14.6%-15.0	%
Consolidated operating income (in millions)	$	87.0-$95.0
Consolidated effective tax rate		20.0%-22.0	%
Earnings per share	$	2.05-$2.15
Weighted average of diluted shares outstanding (in millions)		29.2

Conference Call and Webcast

Management will host a conference call and webcast Tuesday, February 9 at 9:00 a.m. Eastern Time to discuss its financial results for the fourth quarter of 2009, as well as expectations for future earnings. To participate, callers within the U.S. and Canada should dial 800-762-8779, and international callers should dial 480-629-9770 about five minutes before the presentation.

To listen to the webcast, participants should visit the “Investor Relations” section of the Company’s Web site at www.triplesmanagement.com several minutes before the event is broadcast and follow the instructions provided to ensure they have the necessary audio application downloaded and installed. This program is provided at no charge to the user. An archived version of the call, also located on the “Investor Relations” section of Triple-S Management’s Web site, will be available about two hours after the call ends and for at least the following two weeks. This news release, along with other information relating to the call, will be available on the “Investor Relations” section of the Web site.

About Triple-S Management Corporation

Triple-S Management Corporation is an independent licensee of the Blue Cross Blue Shield Association. It is the largest managed care company in Puerto Rico, serving approximately 1.3 million members, or about 34% of the population. Triple-S Management also has the exclusive right to use the Blue Cross Blue Shield name and mark throughout Puerto Rico and the U.S. Virgin Islands. With more than 50 years of experience in the industry, Triple-S Management offers a broad portfolio of managed care and related products in the commercial, Medicare, and Reform markets under the Blue Shield brand. In addition to its managed care business, Triple-S Management provides non-Blue Shield branded life and property and casualty insurance in Puerto Rico. The Company is the largest provider of life, accident, and health insurance and the fourth largest provider of property and casualty insurance in its market.

For more information about Triple-S Management, visit www.triplesmanagement.com or contact waller_kathleen@yahoo.com.

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Forward-Looking Statements

This document contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information about possible or assumed future sales, results of operations, developments, regulatory approvals or other circumstances. Sentences that include “believe”, “expect”, “plan”, “intend”, “estimate”, “anticipate”, “project”, “may”, “will”, “shall”, “should” and similar expressions, whether in the positive or negative, are intended to identify forward-looking statements.

All forward-looking statements in this news release reflect management’s current views about future events and are based on assumptions and subject to risks and uncertainties. Consequently, actual results may differ materially from those expressed here as a result of various factors, including all the risks discussed and identified in public filings with the U.S. Securities and Exchange Commission (SEC).

In addition, the Company operates in a highly competitive, constantly changing environment, influenced by very large organizations that have resulted from business combinations, aggressive marketing and pricing practices of competitors, and regulatory oversight. The following factors, if markedly different from the Company’s planning assumptions (either individually or in combination), could cause Triple-S Management’s results to differ materially from those expressed in any forward-looking statements shared here:

• Trends in health care costs and utilization rates

• Ability to secure sufficient premium rate increases

• Competitor pricing below market trends of increasing costs

• Re-estimates of policy and contract liabilities

• Changes in government laws and regulations of managed care, life insurance or property and casualty insurance

• Significant acquisitions or divestitures by major competitors

• Introduction and use of new prescription drugs and technologies

• A downgrade in the Company’s financial strength ratings

• Litigation or legislation targeted at managed care, life insurance or property and casualty insurance companies

• Ability to contract with providers consistent with past practice

• Ability to successfully implement the Company’s disease management and utilization management programs

• Volatility in the securities markets and investment losses and defaults

• General economic downturns, major disasters, and epidemics

This list is not exhaustive. Management believes the forward-looking statements in this release are reasonable. However, there is no assurance that the actions, events or results anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on the Company’s results of operations or financial condition. In view of these uncertainties, investors should not place undue reliance on any forward-looking statements, which are based on current expectations. In addition, forward-looking statements are based on information available the day they are made, and (other than as required by applicable law, including the securities laws of the United States) the Company does not intend to update or revise any of them in light of new information or future events.

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Readers are advised to carefully review and consider the various disclosures in the Company’s SEC reports.

-FINANCIAL TABLES ATTACHED-

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Condensed Consolidated Balance Sheets
(Dollar amounts in thousands, except per share data)

	Unaudited
	December 31,		December 31,
	2009		2008
Assets
Investments	$	1,049,309	$	1,015,701
Cash and cash equivalents		40,376		46,095
Premium and other receivables, net		272,932		237,158
Deferred policy acquisition costs and value of business acquired		139,917		126,347
Property and equipment, net		68,803		58,448
Other assets		66,279		64,710
Total assets	$	1,637,616	$	1,548,459
Liabilities and Stockholders’ Equity
Policy liabilities and accruals	$	738,970	$	690,080
Accounts payable and accrued liabilities		193,207		203,973
Borrowings		167,667		169,307
Total liabilities		1,099,844		1,063,360
Stockholders’ equity:
Common stock		29,153		31,148
Other stockholders equity		508,619		453,951
Total stockholders’ equity		537,772		485,099
Total liabilities and stockholders’ equity	$	1,637,616	$	1,548,459

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Condensed Consolidated Statements of Earnings
(Dollar amounts in thousands, except per share data)

	For the Three Months Ended					For the Year Ended
	Unaudited					December 31,
	Unaudited		Historical			Unaudited		Historical
	2009		2008			2009		2008
Revenues:
Premiums earned, net	$	479,864	$	438,682		$	1,876,072	$	1,695,457
Administrative service fees		18,661		7,106			48,643		19,187
Net investment income		13,280		14,447			52,136		56,253
Total operating revenues		511,805		460,235			1,976,851		1,770,897
Net realized investment losses		1,816		(11,707	)		614		(13,940	)
Net unrealized investment gain (loss) on trading securities		2,461		(10,257	)		10,497		(21,063	)
Other income (expenses), net		845		(1,160	)		1,237		(2,468	)
Total revenues		516,927		437,111			1,989,199		1,733,426
Benefits and expenses:
Claims incurred		406,282		364,342			1,612,860		1,434,914
Operating expenses		71,358		66,885			279,418		251,887
Total operating costs		477,640		431,227			1,892,278		1,686,801
Interest expense		3,311		3,333			13,270		14,681
Total benefits and expenses		480,951		434,560			1,905,548		1,701,482
Income before taxes		35,976		2,551			83,651		31,944
Income tax expense (benefit)		7,872		571			14,871		7,154
Net income	$	28,104	$	1,980		$	68,780	$	24,790
Basic net income per share	$	0.96	$	0.06		$	2.33	$	0.77
Diluted earnings per share	$	0.96	$	0.06		$	2.33	$	0.77

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Condensed Consolidated Statements of Cash Flows
(Dollar amounts in thousands, except per share data)

	For the Year Ended
	December 31,
	Unaudited			Historical
	2009			2008
Net cash provided by (used in) operating activities	$	66,350		$	(2,982	)
Cash flows from investing activities:
Proceeds from investments sold or matured:
Securities available for sale:
Fixed maturities sold		241,368			228,436
Fixed maturities matured		189,144			91,732
Equity securities		9,877			4,450
Securities held to maturity:
Fixed maturities matured		7,819			22,875
Acquisition of investments:
Securities available for sale:
Fixed maturities		(459,705	)		(505,896	)
Equity securities		(3,684	)		(19,636	)
Fixed maturity securities held to maturity		(1,502	)		(554	)
Net repayment (disbursements) for policy loans		(489	)		30
Capital expenditures		(18,706	)		(22,411	)
Net cash used in investing activities		(35,878	)		(200,974	)
Cash flows from financing activities:
Change in outstanding checks in excess of bank balances		(5,645	)		18,353
Repayments of long-term borrowings		(1,640	)		(1,639	)
Repurchase and retirement of common stock		(26,120	)		(7,645	)
Proceeds from policyholder deposits		4,307			8,018
Surrenders of policyholder deposits		(7,093	)		(7,195	)
Other		—			6
Net cash (used in) provided by financing activities		(36,191	)		9,898
Net decrease in cash and cash equivalents		(5,719	)		(194,058	)
Cash and cash equivalents, beginning of period		46,095			240,153
Cash and cash equivalents, end of period	$	40,376		$	46,095

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