Businessmodel of Cigna

Customer Segments

Cigna offers a broad range of products and services an extensive customer base spanning multiple business sectors and markets. The Company’s customers can be arranged broadly into three principal customer categories:

• Individual Customers, including employees, families, and other individuals;
• Government, comprising various government agencies and bodies, including local and national government and public entities; and
• Commercial, comprising various medium and large-sized commercial entities from a range of sectors, including commercial and certain international health care businesses serving employers and their employees. Cigna serves an extensive domestic customer base across the US. It also serves a range of international customers across Asia and Europe, including in key markets in South Korea, China, Taiwan, Indonesia, India, the UK and Turkey.

Value Propositions

Cigna provides value to its customers in the following ways:

• Its global industry reputation, with the Company established as one of the largest and most well-known medical insurance providers in the world, with an international track record for providing high quality products and services;
• Its international sales and marketing reach, with the Company serving a large domestic customer base in the US, as well as offering products and services to customers in Asia and Europe, notably across Indonesia, South Korea, the UK, Taiwan, India, China, and Turkey;
• Its diverse product portfolio, with the Company offering an extensive portfolio of products and complementary services, including medical, dental, behavioral health, vision, and prescription drug benefit plans;
• Its use of technology, with the Company utilising state-of-the-art technologies and analytics to ensure that it provides effective and reliable services to its customers around the world; and
• Its industry expertise and experience, with the Company employing a network of highly-trained medical insurance professionals, as well as a team of experienced industry executives. ### Channels

Cigna operates a website at www.cigna.com, through which it provides information on its various products, services, markets, and brokers. The Company also operates country-specific websites that tailor their content to local markets. This includes websites for the Company’s business in Hong Kong, the UK, Thailand, Spain, and New Zealand. Customers are able to browse plans and find brokers through the Company’s website, and are also able to manage their plans and access a range of resources through the Company’s online customer portal. The Company additionally offers resources and services through a dedicated mobile app.

Cigna makes a large portion of its sales through its own in-house direct sales force. These sales personnel operate out of the Company’s international network of offices, including in global hubs the US, the UK, Hong Kong, and China. The Company also makes sales and provides services through a network independent insurance brokers, consultants, and sales representatives, as well as via the Cigna private exchange and various third-party private and public exchanges.

Customer Relationships

Cigna offers a range of products and services to customers on a self-service basis. This includes certain resources and tools that can be accessed via the Company’s website, as well as the Company’s customer portal, which allows customers to manage their accounts, make payments, and place claims without interacting directly with members of the Company’s sales and support teams.

Cigna makes a large portion of its sales through its own direct sales force, the individual members of which work closely with clients to ensure that they receive effective and appropriate products and services for their circumstances. The Company offers a similarly personalised service through its network of third party consultants, brokers, and sales agents.

Cigna provides ongoing care and support to its clients who are able to contact the Company’s dedicated support teams in order to receive tailored responses to queries and enquiries, and direct assistance with claims. The Company also offers a range of online resources, such as guides, FAQs, and search tools.

Additionally, customers can follow the Company operations and interact with staff directly via its various social media accounts, including with Facebook, Twitter, YouTube, LinkedIn Pinterest, and Sina Weibo.

Key Activities

Cigna is a health services company. Together with its subsidiaries, the Company offers a range of medical, dental, disability, life and accident insurance and related products and services.

The Company aligns its operations into three core reportable business segments: Global Health Care, which aggregates the operations of the Company’s commercial and Government operating segments; Global Supplemental Benefits, which offers supplemental health, life and accident insurance products primarily in Asia, Europe and the US; and Group Disability and Life, which provides group long-term and short-term disability, group life, accident and specialty insurance products and related services.

Cigna offers its products through various channels, including its own direct sales force and a network of third party intermediaries. These channels are supported by the Company’s various online services and tools.

Key Partners

Cigna works in conjunction with a broad network of partner companies across its three operating segments. These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, including suppliers of various services, tools, and equipment that are utilised across the Company’s operating segments, as well as companies to which certain no-technical functions can be outsourced;
• Channel and Distribution Partners, principally comprising the Company’s network of third-party sales representatives, and independent brokers and consultants who provide products and services on the Company’s behalf;
• Technology Partners, comprising various hardware and software companies that work with the Company to develop and maintain its IT technology systems;
• Healthcare Partners, comprising various healthcare providers and professionals that provide medical care to the Company’s various customers; and
• Strategic and Alliance Partners, comprising a range of market-leading companies across multiple segments, with which the Company collaborates on various branding, marketing, and other projects. Cigna has a number of partnerships in place. The Company recently strengthened its partnership with Hollard Insurance Group to jointly offer services in Sub-Saharan Africa, and has launched a partnership with retailer STORY.

Key Resources

Cigna’s key resources are its intellectual properties and technologies, its online platform, its IT and communications infrastructure, its network of partners, its network of independent sales agents and consultants, and its personnel.

Cigna owns a number of intellectual properties and technologies that are key to its operations. Searches of records published by the US Patent and Trademark Office identified several patent applications in which Cigna is named as assignee, including applications entitled ‘Portion of a display screen with an icon image’, ‘Method and apparatus for objectively monitoring and assessing the performance of health-care providers based on the severity of sickness episodes treated by the providers’ and ‘Method and apparatus for objectively monitoring and assessing the performance of health-care providers’.

Cigna also owns and or leases a number of office locations across its various operating jurisdictions.

Cost Structure

Cigna incurs costs in relation to the development of its technologies and intellectual properties, the development and maintenance of its online platform, the settlement of claims and purchase of health services, the maintenance of its IT and communications infrastructure, the management of its partnerships and distribution agents, the implementation of advertising and marketing campaigns, and the retention of its personnel.

In 2015 Cigna’s largest expenses related to medical costs, which totalled $18.35 billion for the year. Other benefit expenses amounted to $4.94 billion. The Company also recorded mail order pharmacy costs in the amount of $2.13 billion and other operating expenses in the amount of $8.98 billion.

Revenue Streams

Cigna generates revenue through the provision of various medical insurance products, as well as related services such as prescription drug benefit plans, health advocacy programs. The Company’s revenue is derived primarily in the form of insurance premiums paid by customers each month, as well as in the form of service fees.

In 2015 Cigna generated total revenue for the year of $37.88 billion, up on the $34.91 billion recorded by the Company in 2014. The vast majority of the Company’s revenue was derived in the form of premiums, which totaled $29.64 billion for the year. Fees and other revenue totaled $4.49 billon, net investment income amounted to $1.15 billion, and mail order pharmacy revenue amounted to $2.54 billion.