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National Segment Analysis

National Segment Analysis. September 13, 2013. Segment Overview. Focused on 5000+ EE groups, often multi-site Current book of business includes: ~237 Medical clients (~13% market share) / ~4M Medical customers (~14% market share).

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National Segment Analysis

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  1. National Segment Analysis September 13, 2013

  2. Segment Overview Focused on 5000+ EE groups, often multi-site Current book of business includes: • ~237 Medical clients (~13% market share) / ~4M Medical customers (~14% market share). • ~98 of our Medical clients also have Pharmacy (41% penetration) • ~131 of our Medical client have Dental (55% penetration) • ~234 Dental clients (25% market share) / ~6.3M total Dental customers • ~391 Group Insurance clients (~20% market share) that represent ~$1.8B in revenue • ~64 of our Medical clients also have Cigna Group Insurance • Many of these clients also have expats and we provide this product opportunity

  3. Segment Overview (cont.) Top three consultant houses, on a client basis, represent roughly half of our clients although 26% of our client relationships are direct. Towers Watson (18%) Aon Hewitt (18%) Mercer (15%) Client examples: Safeway, Disney, Air Liquide, Waste Management Total client opportunity of ~1,850, with 28M customers and ~$16B in Group Insurance premium.

  4. Value Proposition We will capitalize on our 3 sources of differentiation: Depth in selected markets and segments−Preferred relationships with physicians and hospitals Consultative excellence Customer insight

  5. 5 year Strategy

  6. Segment Performance National as Percent of Cigna Healthcare and Cigna Enterprise 2012 National Plan: Net Income = $142.6 million 2013 Business Plan : • 114,000 new customers • $167 million

  7. Key Competitors

  8. SWOT

  9. SWOT (cont.)

  10. Key Stakeholder View Shareholders – viewed as one of strongest, most solid companies in this section (national payers); less impacted than competition regarding PPACA due to strong ASO product mix; shareholders view the National Segment as a strong overall revenue generator for the company. Customers – often viewed as a typical health insurance company but more engaged clients are driving increased engagement and loyalty. Increasing need for personalized solutions as incentive programs and cost shifting grows. Clients– Many clients view us as a strong partner…particularly the employers who want to find innovative ways to improve the health and well being of employees/customers and while reducing costs. Health Care Professionals (HCPs) - Many view Cigna as typical national payer without differentiated relationship. Physician practices and health systems engaged in value based arrangements view Cigna more as a partner rather than just a payer.

  11. Bottom Line There is much to know and you need a lot of time to read all of this stuff (technical term). Cigna is well positioned for success relative to its two major competitors. Key challenges are greater need to drive real and perceived differentiation, discount position, and market variability that impacts national clients Opportunities are driven by our ability to customize solutions and create value for this demanding segment Product integration provides additional higher margin opportunities within this segment.

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