Health Insurance Carriers

Health Insurance Carriers

Brief Excerpt from Industry Overview Chapter:

Companies in this industry underwrite health and medical insurance policies and administer group hospitalization plans, health maintenance organization (HMO), and preferred provider organization (PPO). Major companies include Aetna, Anthem Blue Cross and Blue Shield, Cigna, Humana, and UnitedHealthcare (all based in the US); as well as Aegon (the Netherlands); Allianz (Germany); and Bupa (UK).

COMPETITIVE LANDSCAPE

Demand for health insurance products is driven by cost of medical care. The profitability of individual companies depends on efficient operations and the ability to enter favorable contracts with health care providers. Large companies and organizations have advantages in negotiating contracts with providers. Small companies can compete successfully by specializing in types of coverage or populations. The US industry is concentrated: the 50 largest companies generate about 85% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products offered by US health insurance carriers include health maintenance organization (HMO), preferred provider organization (PPO), point-of-service (POS), and indemnity benefit plans, according to Healthcare.gov and eHealth Insurance. Main revenue source of health insurance carriers includes health and accident insurance, which accounts for more than 50% of the industry revenue. This is followed by other health and medical insurance (more than 15%), group managed care medical plans (10%), individual medical service plans (10%), Medicare insurance plans (about 10%), and dental service plans (less than 5).