Anthem Inc. executives are telling securities analysts, repeatedly, in public, that they would like to sell more insurance products, and to sell those products through brokers.
Executives said Wednesday, during a conference call with securities analysts, that they hope giving brokers more support will lead to more sales of what Anthem classifies as “specialty benefits.” At Anthem, the specialty benefits category includes products such as life insurance, disability insurance, vision benefits and dental insurance.
Anthem is an Indianapolis-based health insurance giant that holds a Blue Cross license, a Blue Shield license, or both a Blue Cross and Blue Shield license in 14 states. The company’s executives have been saying words such as “insurance” and “broker” out loud, at a time when some other large health insurers have been emphasizing their role as managers of health care services, and minimizing the use of terms such as “insurance” and “broker.”
Gail Koziara Boudreaux, Anthem’s president, said the number of people with Anthem specialty benefits products fell in the second quarter because of a reduction in the company’s level of participation in the Affordable Care Act (ACA) public exchange plan market.
But specialty benefits “has been an area of focus,” Boudreaux said.
Anthem has added leadership and talent in that area, and it believes it’s starting to build momentum there, she said.
Peter Haytaian, president of Anthem’s commercial and specialty business division, said the company believes it has a tremendous opportunity to improve specialty market penetration rates.
“Relative to our competition, we’re not performing as well,” Haytaian said.
One way Anthem is trying to improve penetration is by ”providing tools and engagements for the brokers to be able to more effectively upsell,” Haytaian said.
More From the Call
Also during the analyst call, Anthem executives said that:
- They think that they have been disciplined about commercial health insurance pricing, and that the overall commercial pricing environment has been rational.
- The company is happy with how the smaller individual major medical operation is doing so far this year, and it could get back in to some counties in 2019.
Anthem held the call to go over its earnings for the second quarter.
The company is reporting $2.4 billion in net income for the second quarter on $45.1 billion in revenue, compared with $1.9 billion in net income on $44.5 billion in revenue for the second quarter of 2017.
Here’s what happened to enrollment:
- Overall: The company ended the quarter providing or administering major medical coverage for 39 million people, down from 40 million people a year earlier.
- Individual major medical: Because of the intentional decision to cut back on exchange plan participation, the number of individual major medical insureds fell to 712,000, from 1.8 million.
- Local group: The number of enrollees in local groups fell to 15.6 million, from 15.7 million.
- Big groups: The number of people with Anthem-only national account coverage increased to 7.8 million, from 7.7 million.
- Medicare plan: Medicare plan enrollment increased to 1.7 million, from 1.5 million.
The company’s “selling expense” figure, which includes the cost of agent and broker compensation and other expenses, fell to $324 million, from $345 million.
— Read What Anthem, Centene and Cigna Are Telling Investors This Week, on ThinkAdvisor.