Some health insurance company executives have raised questions about growth at private exchange programs in recent months, but two big, publicly traded exchange operators say their health malls are doing fine.
Wills Towers Watson (NYSE:WLTW), which went into more detail, says its exchange solutions were profitable and grew quickly.
Marsh & McLennan Companies Inc. (NYSE:MMC) gave much less information about its Mercer Marketplace program, but executives seemed happy with it when they mentioned it during a conference call with securities analysts.
Willis, which recently completed its acquisition of Towers Watson, is reporting $20 million in net operating income at its exchange unit for the fourth quarter of calendar year 2015 on $132 million in revenue, up from $12 million in net operating income on $94 million in net operating income for the fourth quarter of 2014.
The company did not give a private exchange enrollee count, but it said the net increase in the number of retiree exchange users was 220,000, and that the net increase in the number of active employee exchange users was 100,000.
In May 2015, Towers Watson seemed to imply that it had about 1.1 million people using its exchange programs.
Willis has been trying to increase private exchange sales by providing more training, and it has also added private exchange sales compensation programs, according to Dominic Casserly, the company’s president.
Given the pressure on U.S. employers to find new, more efficient ways to provide health benefits, “the environment is very conducive to growth,” Casserly said during the recent conference call, which the company held to go over earnings.
Marsh & McLennan gave no Mercer Marketplace performance numbers during its earnings call or in its earnings release, but the company described the Mercer program as one of the reasons the Mercer unit health revenue was up 6 percent for the full year.
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