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THE BAD GUYS
AETNA
• History / CEO
• Core Products and Services
• Bad Guys vs. Good Guys – Strengths, Weaknesses, Financial Performance
• Recent Performance
• Role of Organization
• Keys about Aetna
Overview
2Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
• Establish 1853 incorporates to sell life insurance • 1861 start with participation policies that paid dividends to policy holders– caught industry by
surprise • 1865 annual income tax 1M increasing business 600% over the1861 – this gave Aetna the major
driver in the industry• 1867 Aetna entered the farm mortgage insurance, by 1925 43% of assets (94M) was invested in
farm mortgages• 1891 Aetna issued its first accident policy which entered them into the accident coverage• 1899 Aetna entered the health insurance business • 1902 Aetna entered the employer liability and workers compensation• 1919 Aetna offers group disability• 1951 Aetna introduced major medical coverage• 1960 Aetna entered into international venue….Canada • 1966 Aetna paid their first Medicare claim• 1968 Aetna listed on the NY Stock Exchange• 1973 Aetna created an HMO subsidiary• 1981 Aetna re-organized from a divisional to market focus structure• 1996 Aetna merges with US Healthcare
HISTORY
3Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
• 2003 Mark Bertoloni – Head of Aetna’s specialty products– Former Executive at Cigna
• Hired 2007 Executive VP and Head of Business Operations
• 2010 named CEO of Aetna succeeding Ron Williams – Similar ideologies to Cigna:
– Consumer centered healthcare system– Value Based Payment Design– Expansion of health information technology usage
– Similar relationship to Cigna– Direct competitor– Shared RFP business– Internal Structure – Distribution channels
CEO
4Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
• Health Plans– Medical, Pharmacy, Dental, Vision, Health Expense Funds
• Additional Benefits– Life Insurance, Disability Insurance, Voluntary Products
• Wellness & Behavioral Health– Health and Wellness Programs, Behavioral Health Programs
• Aetna membership facts:– 46 million lives– 23.7 million medical members– Approximately 15.5 million dental members– Approximately 15.4 million pharmacy benefit management services members– 18% Medicare Advantage Membership Growth– 40% of Premiums are Government Business
CORE PRODUCTS AND SERVICES
5Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
• Aetna health care network facts:– Our network stretches across the country and across much of the globe:– More than 1.1 million health care professionals– More than 674,000 primary care doctors and specialists– 5,589 hospitals
• Geographically:– Based out of Hartford CT– International Medical Insurance – Medical, Dental, Life, Disability, Multiple Plan
Options, STD & LTD– Asia, – Europe– Latin America– Middle East & Africa, – North America
CORE PRODUCTS AND SERVICES
6Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
Integrity – Do the right thing for the right reason.
Excellence – We strive to deliver the highest quality and value possible through simple, easy and relevant solutions.
Caring – We listen to and respect our customers and each other so we can act with insight, understanding and compassion.
Inspiration – We inspire each other to explore ideas that can make the world a better place.
Integrity. Excellence. Caring. Inspiration.
VALUE PROP
GOOD GUYS VS BAD GUYS
8Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
Cigna Aetna Comments -- compared to CignaCash 1420 1420 SimilarCash Flow 1994 3372 HigherTotal Revenues 34914 58003 HigherOperating Profit 3304 3499 SimilarOperating Profit Margin 9.5% 6.8% LowerNet Profit 2102 2041 SimilarNet Profit Margin 6.0% 3.6% LowerEarnings per Share 7.83 6.2 LowerReturn on Equity 19.3% 14.7% LowerRevenue Growth 7.8% 22.6% HigherNet Income Growth 42.0% 6.6% LowerEarnings per Share Growth 51.2% 6.6%
• Similarities Seeking to grow in global
Seeking to grow in governmental
Seeking to grow in individual
Seek to double size in next 6 years
Grow ACO's
Customer-centric
Similar product lines
Moving to value-based payments
SIMILARITIES VS DISIMILARITIES
9Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
• Disimilarities Smaller global footprint
Aetna has a population health solution as part of strategy
Intend to grow more rapidly
Higher dividends
Higher M&A activity
Larger MC presence (Humana)
Real-time decision support
Today: Aetna after acquisition the acquisition of Humana
10Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
11Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna