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Cigna: Select Segment Analysis

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Presentation on theme: "Cigna: Select Segment Analysis"— Presentation transcript:

1 Cigna: Select Segment Analysis

2 Agenda Segment Overview Select Segment Strategy
5 Drivers of Select Segment Competition Overview External Factors Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna

3 Overview of Cigna Select Segment
Cigna Select - serving businesses with fewer than 250 employees1 - offers the full scope of health service solutions clients need to maintain their employees' health, well-being and sense of security. Working alongside its broker partners, Cigna Select leverages a long history and expertise in serving this unique segment, offering more choice in plan design, more funding options than its competitors and the strong network access and service capabilities that clients demand. And by promoting the value of full participation in Cigna's extensive health and wellness programs and resources, Cigna Select provides clients a clear opportunity to benefit from healthier, more productive employees that can translate to a healthier bottom line. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna

4 Overview of Cigna Select Segment
Services/Products: Medical: HRA, HAS, HMO, PPO Pharmacy: Performance/Advantage/Medical/Generics Ancillary: Dental, Vision, Disability, Life/AD&D Medical Management: PHS + Health Advocacy: Common chronics, Maternity Management, Oncology, Pain Management Wellness: Risk Assessment, 24hr Nurseline, Healthy Frontiers, Trend Management Geographic Operations: US Domestic Customers/Demographics: Employers with Employees Distribution Channels: Brokerages Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna

5 Select Segment Strategy
Core Strategies: Broker: Select Segment relies upon Brokers for all sales, however going forward, Select Segment will have multiple sales channel. Client: Build direct-to-client relationships across multiple channels. Streamline and coordinate experiences across all products. Customer: Build a direct connection to customers on a client intranet portal. Have the ability to purchase supplemental products using retail transaction engine with instant/accurate pricing. Provider: Create a true partnership with providers including a deep point of care coordination. Obtain rich data to help providers make decisions. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna

6 Select Segment Strategy ctd.
Value Propositions: Client Experience: Provide clients with a streamlined experience across multiple Cigna products. Customer Engagement: Increase engagement through enhanced health and wellness capabilities including incentives. Products/Capabilities: Deliver next-gen wellness programs Sales: Develop sales strategy based on customer segmentation and geography Pricing/Underwriting: Prepare for a more “retailized” environment with instant and accurate quote capabilities. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna

7 5 Drivers of Select Segment
2.85 Billion in revenue 2.62 Billion in expenses Cash Increase of 21% over 2011 “We continue to see great progress there as employers are seeing this as an attractive alternative” David M. Cordani, nd Qtr Earnings Call 50% of Select business ASO Growth 857,000 total insured lives People Select U.S Market accounts for 6% of customers, but 10% of total revenue Profit Our Customers! Assets Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna

8 Competition Overview Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna

9 Competition Overview ctd.
All major competitors are focusing their Select messaging on brokers (vs. employers or consumers). Similarly, all of our communications are directed at Brokers and half of these touch points focused on self-funding, in alignment with our communications strategy. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna

10 If we just look at the 34% of brokers that put Cigna in their top 3, we have a competitive advantage -- except for COST Cigna ranking -- 1st, 2nd, 3rd or 4th -- Versus Aetna, UHC and BCBS All broker respondents Only the brokers that put Cigna in their top 3 Broker Table Stakes Providing good benefits for the cost 4th 2nd Providing good network access for the cost 3rd Providing good service and problem handling for me, the agent/broker 1st Providing me with the resources to sell more business Offering ways my clients could lower healthcare costs Broker Differentiators Being efficient and accurate in administrative matters for employers on payments, billing, and service Providing overall good member service for my clients’ employees Providing different ways my clients can fund health benefits – including self-funding and fully insured Providing data and information to my clients’ employees to help them make better health decisions Providing useful data and information to my clients about their employees Having programs and plan designs that help increase the productivity of my clients’ employees Providing effective health, wellness and disease management capabilities Offering convenient ways to bundle health, disability, life coverage and other products and services See Appendix for detailed rankings

11 SWOT Analysis Strengths Opportunities Threats Weaknesses
Cigna is the fastest growing player, but still lags the national competitors in brand awareness, top 3 consideration and net promoter score. Brokers rank Cigna 1st out of the 4 national players on being “differentiated” If we just look at the Brokers that put Cigna in their top 3 consideration set, we have a competitive advantage -- except for Cost Overall, Aetna appears to be the national competitor in the weakest position. Cigna compares favorable to Aetna on most key measures. Continue to invest in building brand awareness and image Communicate to the marketplace that Cigna is the up and coming carrier Reminder that our price situation is still a significant barrier to sales growth Focus our resources on the 34% of brokers that already put us in their top 3 consideration set Consider targeting Aetna to exploit their apparent weaker position with brokers All competitors include services for wellness need. Differentiation is based on how packaging and Incentives. Threats Weaknesses Brokers rank Cigna 4th out of the 4 national players on being able to “meet their table stakes” (primarily due to cost) Lack of incentives offering. ROI is difficult to measure and prove. Wellness Select Segment “story” is not well defined leaving Sales with little or no direction on what solutions work best for each client. Marketing material content and availability needs rework to provide the best turnkey solution for Select Segment. Gaps in reporting capabilities (i.e. Participation results for a defined market or wellness solution). Trend Management System is used as a supplement predictive modeling tool behind our vendor partner. Is there a strong enough linkage between the Health Assessment, TMS and outcomes? Price sensitive market. Solution through vendor partner 43% of brokers believe that the percentage of employers switching carriers will be higher in 2012 then it was in 2011 Brokers are evenly split on how they are thinking about their future – 40% are optimistic and 44% are worried. This seems to indicate uncertainty. The top two topics of interest to brokers in 2011 are Reform and Health and Wellness…Case studies and bundling are of least interest Competition: ongoing product development and activities by our competitors. Is $3.54 pepm a competitive price? Carve out to stand alone vendors (client desire to have a consistent wellness presence agnostic to medical carrier). Differences between Select and other CIGNA business (CIGNA Onsite Wellness Health Initiative. Health care reform.

12 Conclusion What can we learn from analyzing this Segment? What should we do?

13 Wellness 3.0: Milestones Opportunity Owner/Lead Due Date
Launch of Apollo Product Initiated 6/1 (phased launch) Develop marketing collateral for CSI 7/1/2011 Continue to enhance Sales Training Plan for Q3 & Q4 Product/Wellness Directors Define Wellness Story Product/Wellness Director–Cris Benz Define program valuation approach (i.e. ROI) Develop COH biometric data feed to Alere Develop next generation of client/customer communications 8/1/2011 Complete simple time and resource studies. Expand Health Assessment participation reporting capabilities Determine Select Segment Wellness fund approach 9/1/2011 Complete annual refresh of competitive analysis 91/12011 Determine Healthy Frontiers program design changes for 2012 Complete Trend Management analysis Product/Wellness Director – Marsha Develop on-line survey for clients with Basic Wellness 10/1/2011 Capitalize on any opportunities presented by Healthcare Reform 1/1/2012

14 Wellness 3.0: Measurement of Success
Metric Target Successful Apollo Launch on 6/1 - Yes or No - Low client disruption Yes Less than 10 unique customer issues CIGNA Onsite Health Wellness Initiative (Client Engagement) Client penetration for new and renewing clients Presale: Current = 20%; Goal = 30% Renewals = 7%; 2011 Goal = 10%; 2012 Goal = 15% Health Assessment Participation Rates (Customer Engagement) Health Assessment Participation Reporting Partnership Program: Current = 34%; Goal = 40% Healthy Frontiers: Current = 29%; Goal = 35% Sales Communication Certification of Wellness Phase I: Consultative Expert - 6 Wellness questions included in Value Proposition. Phase 2: TBD. Working with Sales Effectiveness. Healthy Frontiers Satisfaction Survey by Health Frontiers Customers only (Note: confirming current results) 85% satisfied or very satisfied in the program and helping them improve or maintain healthy habits 85% find health assessment report useful or very useful in improving or maintaining healthy habits.

15 Facets Spectrum of Wellness
Product: Solutions provide options for Clients based on commitment to wellness and funding available. Levels of Client and Customer Engagement Low High Partnership Program Healthy Frontiers Plus Biometrics Multi-Year commitment HA Participation Rate Health Coach/Lifestyle Mgmt Participation Rate Year 1 & 2 Rate Adjustment Presale Only All funding types Healthy Frontiers Standard Wellness 24/7 Nurseline Health Coaching Healthy Living Programs Quarterly Challenges Trend Mgmt System Buy-up at $3.54 pepm All funding types CIGNA Onsite Health Wellness Initiative Onsite biometrics (or home kits) Highly Engaged includes Coaching and Seminars Client Reporting Rates socialized/Baked-in (across Presale and Renewing) All funding types Wellness 1.0 Health Assessment Participation Rate 1st Year Rate Adjustment Presale Only All funding types Standard Wellness Health Assessment Resources & Tools Smoking Cessation Nurse24 Chat Client Reporting Baked-in Medical All funding types

16 Wellness Program Performance
Healthy Frontiers clients represents only 6.4% (160 clients) of all Facets Select clients. Health Assessment completion rate is 29% for Healthy Frontier clients and 3.5% for all Facets. Bottom line ~ Client and Customer engagement levels fall short. Client Level Engagement Healthy Frontiers* (160 clients) Partnership Program* (62 clients) Wellness 1.0* Presale Only (230 clients) CIGNA Onsite Health Wellness Initiative – Presale* (202 clients) CIGNA Onsite Health Wellness Initiative – Renewals** (115 clients) % of Total Clients 6.4% 2.0% 25%+ 20% 7% Health Assessment Completion Rate Comparisons (Customer Engagement) Alere Book of Business (Benchmark) Facets Book of Business (Includes clients w/Standard pkg) Basic Wellness Wellness 1.0* Healthy Frontiers*** Partnership Program* % of Customers 45% 3.5% TBD 29% 34% *Select Segment Only; **Includes Proclaim and Facets Select Segment ***Included Regional; +Estimate provided by Underwriting

17 Product Level SWOT Strengths Weaknesses 4/21/2017
Packaged Wellness solution with baked-in or buy-up options providing a combination of turnkey and flexible features. Quick to market with new solutions through vendor partnership (i.e. Nurse24 Chat). Robust reporting package for Healthy Frontier clients at no cost including year over year cohort reports strengthening multi-year results and relationship. Using wellness as a risk selection tool whereby actively increasing engagement (Wellness 1.0 and Partnership Program). CIGNA Onsite Wellness Initiative delivering biometrics, seminars, coaching and detailed client report out session by a Health Educator at no cost. Consulting staff resources for continued wellness services such as multi-year planning and incentive planning (Wellness Directors, CSS and CMs). Trend Management System (unique, effective and compelling). Inconsistent wellness fund handling (Fully Insured vs. Self-funded). Lack of incentives offering. ROI is difficult to measure and prove. Wellness Select Segment “story” is not well defined leaving Sales with little or no direction on what solutions work best for each client. Marketing material content and availability needs rework to provide the best turnkey solution for Select Segment. Gaps in reporting capabilities (i.e. Participation results for a defined market or wellness solution). Trend Management System is used as a supplement predictive modeling tool behind our vendor partner. Is there a strong enough linkage between the Health Assessment, TMS and outcomes? Price sensitive market. Solution through vendor partner

18 Product Level SWOT Opportunities Threats 4/21/2017
Determine Select Segment wellness fund approach for both funding types and implement (considering incentives as part of that fund or separate) (W1, W2, W8 and T1) Create an Incentives White Paper. (W2) Define ROI messaging (be smart about what to measure keeping aligned with the Value Proposition and possibly deliver above and beyond). (W3) Define the Wellness story – define the continuum of wellness solutions and the client attributes that fit. Include both client and customer story. (W1, W4, W8, T2, T6) Develop the next generation of communications. The right communications to ensure turnkey for all levels. Include customer facing materials describing what is done with the data an how it is protected. (W5 and T2). Continue to enhance Sales Training plan for (W1, W5 and T1) Expand reporting capabilities for defined markets and wellness solutions. (W6) Complete simple time studies to determine time and staff resources required for successful wellness solutions. (T1) Complete annual refresh of competitive analysis. (W4, W8 and T4) Complete wellness vendor research study to determine the actual threat of carve-outs. (T5) Schedule at a minimum of 2 discussions with Alere to discuss their planned product enhancements. (W9 and T3) Promote industry leading report out session by CIGNA Onsite Wellness experts. (W4, W5 and T1) Complete Trend Management analysis on the additional identification and value provided. (W7) Capitalize on any opportunities presented by Healthcare Reform (i.e. Grants for small businesses). (Not tied to specific Threat or Weakness) Client issues: budget, time and staff resources. Customer privacy concerns (i.e. intrusiveness objection). Vendor relationship and performance. Competition: ongoing product development and activities by our competitors. Is $3.54 pepm a competitive price? Carve out to stand alone vendors (client desire to have a consistent wellness presence agnostic to medical carrier). Differences between Select and other CIGNA business (CIGNA Onsite Wellness Health Initiative. Health care reform.

19 Wellness 3.0: Opportunities Focus
Back to the fundamentals of 4Ps Product + Price + Promotion + Place = Increased Engagement Product Create an Incentives White Paper. Medium Define ROI messaging. Medium Expand reporting capabilities. High Schedule two discussions with Alere to discuss planned and future product enhancements. High Capitalize on technology enhancements by vendor. High Complete Trend Management analysis on additional identification and value provided to Facets Select. Low Complete annual refresh of competitive analysis, including product and technology focus. High Capitalize on any opportunities presented by Healthcare Reform (i.e. grants for small business). Low Price Determine Select Segment Wellness Fund approach for Fully Insured and Self-Funded clients. Medium Complete annual refresh of competitive analysis, including price focus ($3.54 pepm check). High Promotion Define the Wellness story. High Develop the next generation of communications. High Promote industry leading report out session by CIGNA Onsite Wellness experts. Medium Continue to enhance Sales Training plan. High Complete simple time studies to determine time and staff resources required for successful wellness solutions. Medium Place Complete wellness vendor research to determine the actual threat of carve-outs. Low Emerging Markets and Small Group. Low


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