TriNet Earnings: Rising Insurance Costs and Modest Hiring Offset by Improving Retention

Narrow-moat TriNet reported mixed second -quarter 2024 results that met our top-line expectations but fell short of our profitability assumptions amid ongoing pressure from elevated insurance costs. As consistent with management’s guidance, TriNet’s insurance costs are normalizing from pandemic-era lows amid rising utilization and health cost inflation. We expect TriNet to pass through elevated costs through regular quarterly repricing, and for the insurance cost ratio to normalize to 89% from 2025 onward.