The heads of many big U.S. health insurers now seem to avoid using the word “insurance” when they’re talking about their operations with securities analysts. They also tend to shy away from mentioning “insurance agents,” “brokers” or people who sell insurance.
Gail Boudreaux, the chief executive officer of Anthem Inc., used the words “broker” or “brokers” four times Wednesday during a company analyst call.
Anthem — an Indianapolis-based company that holds the Blue Cross license, the Blue Shield license, or both the Blue Cross and the Blue Shield licenses in many states — held the call to go over its first-quarter earnings.
Boudreaux told analysts that Anthem is making efforts to increase sales of commercial insurance products, not just government plan products and services.
“We feel very good about our commercial growth this quarter, and, quite frankly, about our projections for the full year,” Boudreaux said during the call, which was streamed live on the web.
Anthem has tried to take a disciplined approach to pricing in a highly competitive market, but it has also tried to invest in simplifying its business proceses, and in developing support tools for brokers, Boudreaux said.
“We’ve committed to growing our commercial business, in part, by developing a broad suite of new consumer products, and by making it easier for our customers and brokers to do business with us,” Boudreaux said.
In addition to developing new digital broker tools, Anthem has improved its online employer shopping tools, Boudreaux said.
Anthem is setting up a pharmacy benefits management (PBM) unit, IngenioRx, and Boudreaux also talked about brokers playing a role in building IngenioRx.
“Earlier this month, IngenioRx hosted its second annual client conference,” Boudreaux said.
The conference was “well attended by consultants, brokers, and current and prospective employer and Blue plan clients,” Boudreaux said.
Pete Haytaian, president of Anthem’s commercial and specialty business division, said the company believes it’s offering better products in a market that’s rational but competitive.
“We’re providing greater services to our distributors and engaging with providers in a differentiated way,” Haytaian said.
Anthem is reporting $1.6 billion in net income for the first quarter on $25 billion in revenue, up from $1.3 billion in net income on $22 billion in revenue for the first quarter of 2018.
The company ended the quarter providing or administering major medical coverage for 41 million people, or 2.9% more than it was covering a year earlier.
Here’s what happened to the number of people covered by certain types of products:
- Fully Insured Group Health: 15 million (+6.5%)
- Self-Funded Group Health: 25 million (+0.8%)
- Individual Major Medical: 773,000 (+2.4%)
- Medicare Advantage: 1.1 million (+25%)
- Medicare Supplement: 867,000 (+5.3%)
- Dental: 6.0 million (+2.9%)
- Vision: 7.2 million (+5.7%)
John Gallina, Anthem’s chief financial officer, said the company might use about 50% of its extra cash to reinvest in the business or make deals, 30% to buy back shares, and 20% to pay dividends.
He said that, when Anthem is looking at opportunities to make deals, it’s focusing on Medicare Advantage “tuck-ins that either provide us a footprint or solidify our footprint in the market.”
Information about Anthem earnings call recordings is available here.
— Read We’re the Ones Actually Improving Health Care: UnitedHealth, on ThinkAdvisor.