Businessmodel of Aetna

Customer Segments

Aetna sells a broad range of insurance products and related care services to a diverse customer base. The Company’s customers can be organised by the Company’s two core business segments, which serve different clients:

• Health Care, which provides products to employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labour groups and expatriates; and
• Group Insurance, which provides products and services to a range of commercial entities, form small employer groups to large, multi-site and or multi-state employer programs. Aetna serves customers principally in the US, with its Health Care segment offering certain products in a small number of countries outside the US. The Company offers group insurance products in 49 US states as well as Washington DC, Guam, Puerto Rico, the US Virgin Islands and Canada.

Value Propositions

Aetna provides value to its clients in the following ways:

• Its industry standing and reputation, with the Company established as well-known and well-regarded insurance provider in the US, having a track record for providing reliable and effective products and services;
• Its broad range of products, with the Company offering a broad range of insurance products – including life insurance, disability insurance, and long-term care insurance – as well as various complementary products and services to both individuals and employers;
• Its regional sales reach, with the Company serving customers across all but one of the US’s 50 states, as well as in territories such as Guam and Puerto Rico, and international jurisdictions such as Canada;
• Its accessibility, with the Company operating a multi-channel distribution system, employing a network of independent brokers and intermediaries, as well as offering certain online services; and
• Its industry expertise and experience, with the Copan employing specialist insurance professionals, as well as experienced industry executives. ### Channels

Aetna operates a website at www.aetna.com, through which it provides information on its various products, services, and markets. The Company enables customers to shop for plans directly through its website, with sales ultimately agreed through authorised individuals. It also operates an online customer portal, through which clients can manage their plans, make payments, and place claims.

Aetna sells many of its products through an in-house direct sales force, which operates out of the Company’s network of sales and administrative offices across the US. The Company also sells its health care and group insurance products through various third-party intermediaries and channels, including independent brokers, agents and consultants who assist in the production and servicing of business, Public Exchanges, and Private Exchanges.

Aetna pays commissions, fees and other amounts to its brokers, agents, consultants and sales representatives. The Company supports its sales and marketing operations with a multi-channel advertising program that includes direct marketing, television, radio, billboards, print media and social media.

Customer Relationships

Aetna offers a range of products and services to its customers on a self-service basis, both directly through its website and via its online customer portal. These channels allow customers to manage their coverage plans, make payments, and access resources without interacting directly with members of the Company’s sales and support teams.

Aetna operates its own direct sales force, which works closely with customers in order to ensure that each client receives the appropriate coverage for their individual circumstances. The Company’s network of independent agents and brokers also consult directly with customers, with independent consultants and brokers frequently involved in employer health plan selection decisions and sales for large plan sponsors.

Aetna provides ongoing support to its customers. This includes a range of online resources, such as FAQs, and coverage information, as well as personalised customer assistance through its dedicated customer support personnel. These employees will assist clients with claims, queries, and enquiries.

Additionally, customers are able to follow the Company’s activities, and interact with it directly, through its social media accounts, including with Facebook, Twitter, YouTube, LinkedIn, and Tumblr.

Key Activities

Aetna is a diversified healthcare benefits company and insurance provider.

It aligns its operations into three reportable business segments: Health Care, which provides a range of medical, pharmacy benefit management services, dental, behavioural health and vision plans, as well as complementary services such as accountable care solutions; Group Insurance, which provides life insurance, disability insurance, and long-term care insurance products; and Large Case Pensions, which manages a range of retirement products, including pension and annuity products, primarily for tax-qualified pension plans.

The Company serves a broad customer base, including employer groups, individuals, college students, part-time and hourly workers, health plans, healthcare providers, government-sponsored plans, labour groups, and expatriates.

Key Partners

Aetna works closely with a number of companies and organisations in order to provide its clients with efficient and effective services. These partners can be organised broadly as follows:

• Supplier and Vendor Partners, comprising suppliers of various services, technologies, equipment, and tools that are used across the Company’s operating segments, as well as companies to which certain functions can be outsourced;
• Channel and Distribution Partners, comprising the Company’s network of intermediaries and third parties, including brokers, agents, and consultants, that provide services on the Company’s behalf;
• Community and Social Partners, comprising various non-profits and charitable organisations with which the Company collaborates on community and social projects, primarily in the US; and
• Strategic and Alliance Partners, comprising market-leading companies from a range of sectors, with which the Company collaborates on certain joint projects, including marketing and branding projects. Aetna has a number of partnerships in place. This includes an information technology partnership with Infosys, a partnership with Banner health to improve care and reduce costs, and a tie-up with Inova to develop innovative products and services.

Key Resources

Aetna’s key resources are its intellectual properties and products, its online platform, its IT and communications infrastructure, its network of intermediaries and independent agents, its partners, and its personnel.

Aetna owns a number of trademarks and patents that are used in the provision of its various products and services, including trademarks such as Aetna Navigator, ActiveHealth, bswift, CareEngine, Coventry, and DocFind. Searches of records published by the US Patent and Trademark Office identified one patent application filed in Aetna’s name: ‘Computer display for a server maintenance tool graphical user interface’.

Aetna additionally owns and or leases a number of physical properties across the US. This principally includes the Company’s network of sales and administrative offices.

Cost Structure

Aetna incurs costs in relation to the development of its products and technologies, the maintenance of its IT and communications infrastructure, the development of its online platform, the settlement of claims and provision of health care, the implementation of marketing and advertising campaigns, the management of its partnerships and intermediaries, and the retention of its personnel.

In 2015 Aetna’s largest cost was its health care costs, which totalled $41.71 billion for the year. The Company also recorded selling costs in the amount of $1.49 billion, and general and administrative expenses of $9.77 billion.

Revenue Streams

Aetna generates revenue through the provision of various insurance products, as well as related products and services, such as accountable care solutions and pharmacy benefit management services. The Company principally derives revenue in the form of insurance premiums paid by its clients, but also in the form of service fees for its complementary services.

In 2015 Aetna generated total revenue of $57.56 billion, up slightly on the $55.11 billion recorded by the Company in 2014. This principally comprised revenue in the form of premiums, totalling $51.62 billion, of which $28.71 billion was attributed to commercial premiums, and $22.91 billion was attributed to government premiums.