Health Insurance Carriers Industry Overview

Excerpt from Health Insurance Carriers Report

Companies in this industry underwrite health and medical insurance policies and administer group hospitalization plans, HMOs, and PPOs. Major companies include Aetna, the Blue Cross and Blue Shield Association, Humana, and UnitedHealth Group, all based in the US, as well as AEGON (the Netherlands) and Allianz (Germany).

Competitive Landscape

Demand for health insurance products is driven by the rising costs of medical care. The profitability of individual companies depends on efficient operations and the ability to negotiate favorable contracts with health care providers. Large companies and organizations have advantages in negotiating contracts with health care providers. Small companies can compete successfully by providing special coverage plans as part of government programs such as Medicaid, or for specialized populations. The industry is highly concentrated: the 50 largest companies generate about 75 percent of revenue.

Products, Operations & Technology

The industry provides various types of health insurance plans that have built-in cost containment measures. Among the major products are HMOs; preferred provider organizations (PPOs); point-of-service (POS) plans; and indemnity benefit plans. Companies usually offer a number of such plans and each may operate dozens of them.