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Cigna Global:
Health, Life & Accident
TECDP Fall Foundations
October 2nd, 2013
Laura DeWald, Matt Fugere, Tiffany Miller, Kyle Poor, Christine Recsetar, Dan Shilov, Mike Stone & Dan Veras
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HL& A Business Overview
Global Totals (Individual & Group)
• 15,000+ global workforce (9,500+ = distribution
force, primarily telemarketers)
• 30+ years of experience
• 11M customer relationships
• Servicing customers in 200+ countries/jurisdictions
How we lead:
We bring innovative products and
services to the market we serve,
primarily through our direct marketing expertise
HL&A
• Local licenses and partnerships in approximately 20
countries and jurisdictions throughout Europe and
Asia-Pacific
• South Korea
• Taiwan
• Indonesia
• Hong Kong
• United States
• European Union
• China
• New Zealand
• Thailand
• Turkey
Key
Differentiator
Our Value Prop:
We seek to be recognized
by individuals as the “go to”
company for the best health and
related products and services,
providing easy to access, simple,
affordable short-term, risk-based
products to our customers around
the world
Direct to consumer distribution,
customer insights and marketing
capabilities
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Our Business: Health, Life & Accident
• Local licenses and partnerships in approximately 20 countries and jurisdictions throughout Europe and
Asia-Pacific
• South Korea
• Taiwan
• Indonesia
• Hong Kong
• United States
• European Union
• China
• New Zealand
• Thailand
• Turkey
• Product Offerings
• Fixed cash payments for hospitalization
• Lump sum payment (critical illness; dental)
• Personal accident; personal credit protection
• Term life and variable life
• Travel and related insurance
• Medigap
Distribution to Individuals
• Through affinity partner customer lists
• Expanding in other DtoC channels (Direct Response TV (DRTV); Internet and Bancassurance)
• Target individuals (typically middle class)
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Strategy
Strategy
We will become the leading direct insurance marketing company in Asia, and the leading
global health services company in our chosen segments
• Strategy Execution: Deepening our reach in selected geographies and market
segments, as well as accelerating our engagement with preferred health care
professionals
– In 2012 we extended our reach in Turkey through the Joint Venture with
Finansbank and expanded in the US Medigap and supplemental lines through the
acquisition
– In 2011 we acquired FirstAssist in the UK which added a travel insurance product
line and expanded our distribution channels
– Moving forward, we will expand our customer centric capabilities, invest in China,
expand our footprint and business lines, leverage our network and develop a high
performance workforce
– Successful execution of this plan will position us as the leading direct marketing
company in Asian insurance markets and the leading global health services
company in our chosen segments
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5 Key Performance Drivers
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna
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Recent performance
• Profit
– Revenue is increasing at a higher rate than Expenses
(14.8% to 13.8%)
– Growth of $33m in Net Income (‘12 to ‘13)
– South Korea generated 54% of this segment’s revenue and
90% of earnings
• Assets
– Operating Expenses have increased yr over yr and are
projected to sustain growth
• People
– Continue to be a differentiator for Cigna’s aggressive growth
strategy
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Net Income Growth
2010
2011
2012
2013
2014
2015
2016
2017
Total Revenue
$ 1,322 $ 1,626 $ 2,090 $ 2,410 $ 2,825 $ 3,240 $ 3,660 $ 4,175
Total Expense
$ 1,192 $ 1,492 $ 1,900 $ 2,174 $ 2,525 $ 2,868 $ 3,203 $ 3,620
Net Income (AFIT)
$
84 $
97 $
133 $
166 $
210 $
261 $
320 $
389
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Competition - Intro
• Key Competitors
– Locally-Based Insurance Co (Subsidiaries)
– Traditionally the competition has been from this group.
– Multinational Companies
– Emerging players in this market, Cigna is a pioneer in this space
– AXA
– Allianz
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Competition – Comparison w/ Cigna
• Measures of Financial Strength (2012)
– Earnings Per Share
– CI: 5.61
– Allianz: 15.43
– AXA: 23.35
– Cash
– CI: $2.91 Billion
– Allianz: $12.4 Billion
– AXA: $3 Billion
– Revenue Growth
– CI: 33.2
– Allianz: 5.5 %
– AXA: 4.6%
• “In most overseas markets, perception of financial strength is also an
important competitive factor.”
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AXA- The AXA group of companies engage in life, health and other
forms of insurance, as well as investment management.
• Strengths/ Weaknesses
– $23.35 stock
– Cash = $3 billion
– Earnings per share = $2.23
– Revenue growth = 4.6%
• History- French global investment, retirement, and insurance group
headquartered in Paris, established in 1816.
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Other External Factors
• Performance
– 69% earnings increase 2010-2012
– JV with Finansbank
– Acquisition of FirstAssist
• Strengths
– Steady growth in an unsteady market
– Direct-to-consumer distribution
– Marketing
– Physician relationships
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Other External Factors (cont’d)
• Weaknesses
– Fragmented IT market-to-market
• Opportunities
– Aging global population
– Desire for personalization and information transparency
– Social media emergence
– Mobile technology dominance
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Other External Factors (cont’d)
• Threats
– Tax fluctuation
– 37.7% earnings growth BEFORE tax
– Economic instability
– Consumer credit contraction
– Global outreach of competitors
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How do key stakeholders –
Cigna shareholders,
customers, clients, etc.
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Key Stakeholders – View This Segment
• Cigna shareholders
– Growth!
• Customers
– E.g. Cancer Coverage
• Clients
– South Korea, Taiwan, Indonesia, US, EU, China, New Zealand, Thailand and turkey.
– 50% Chinese JV
– 51% Turkey JV
Outside the U.S., sales of our direct to consumer Health, Life and Accident business
continues to grow by more than 20% per year. Our successful expansion into the
Internet and direct response TV distribution complements our leading telemarketing
capabilities.
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Effective December 31, 2012, Cigna changed its external reporting segments.
The primary change is that the two businesses that comprised the former
International segment (international health care and supplemental health, life
and accident) are now reported as follows: 1) substantially all of the
international health care business (comprised primarily of the global health
benefits business) is now combined with the former Health Care segment and
renamed Global Health Care; and 2) the supplemental health, life and accident
business becomes a separate reporting segment named the Global
Supplemental Benefits segment. In addition, certain disability and life products,
previously reported in the former Health Care segment, are now reported in
the Group Disability and Life segment. Prior period segment information has
been conformed to the current reporting segments. See Cigna's Form 8-K filed
on January 24, 2013 for additional information.
Cigna acquired several businesses during 2012, including: The Turkey joint
venture (JV) on November 9 for approximately $116 million, Great American
Supplemental Benefits on August 31 for approximately $326 million, and
HealthSpring on January 31 for approximately $3.8 billion. The financial results
of these acquisitions are included in results from the date of acquisition. The
Turkey JV and Great American Supplemental Benefits are included in the
Global Supplemental Benefits segment and HealthSpring is included in the
Global Health Care segment.
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Offered by: Connecticut General Life Insurance Company or Cigna Health and Life Insurance Company.
"Cigna,” the "Tree of Life" logo and "GO YOU" are registered service marks of Cigna Intellectual Property, Inc., licensed for use by Cigna Corporation and its operating
subsidiaries. All products and services are provided by or through such operating subsidiaries and not by Cigna Corporation. Such operating subsidiaries include Connecticut
General Life Insurance Company, Cigna Health and Life Insurance Company, and HMO or service company subsidiaries of Cigna Health Corporation and Cigna Dental
Health, Inc. All models are used for illustrative purposes only.
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© 2013 Cigna. Some content provided under license.
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