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Humana and Aetna talk about producers

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A big health insurer has given investors a peek at its distribution force strategy in a new report filed with the U.S. Securities and Exchange Commission (SEC).

The insurer, Humana Inc. (NYSE:HUM), said in its 2015 10-K, or official annual report for investors, that it ended with 1,600 sales representatives and about 1,400 telemarketing representatives. A year earlier, the company had 1,700 sales reps and 1,200 telemarketers.

The number of sales reps has fallen about 6 percent, and the number of telemarketers has increased about 17 percent.

See also: Aflac’s earnings: 3 things executives said about producers

Humana said its sales and marketing channels also include an alliance with Wal-Mart Stores Inc. that lets it put Medicare Part D prescription drug plan sales reps in Wal-Mart stores.

The company used the same description of its broker commission practices that it used in its 2014 10-K.

Meanwhile, Aetna Inc. (NYSE:AET) gave no direct producer count or producer compensation numbers, but it says in its 10-K that its “selling expenses” category, which includes broker commissions and the variable component of its sales force compensation along with premium taxes, fell to 2.5 percent between 2014 and 2015, to $1.6 billion.

Publicly traded health insurers have said little about agents and brokers in earnings conference calls with securities analysts in recent years. Aetna does talk about its relationship with producers in the 10-K, in a description of risk factors.

Aetna noted that it must compete intensely for the services and allegiance of independent brokers, consultants and agents.

“Our sales could be adversely affected if we are unable to attract, retain or motivate sales personnel and third-party brokers, consultants and agents, or if we do not adequately provide support, training and education to this sales network regarding our complex product portfolio, or if our sales strategy is not appropriately aligned across distribution channels,” the company says. “This risk is heightened as we develop, operate and seek to expand our consumer business and our business model evolves to include a greater focus on consumers and direct-to-consumer sales, such as competing for sales on insurance exchanges.”

See also: 

Limelight strategist: The exchange force is real

California exchange chief proposes agent comp floor

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