Companies in this industry underwrite health and medical insurance policies and administer group hospitalization plans, HMOs, and PPOs. Major companies include Aetna, Anthem, CIGNA, Humana, and UnitedHealth Group (all based in the US), as well as AEGON (the Netherlands), Allianz (Germany), and BUPA (UK).
Demand for health insurance products is driven by cost of medical care. The profitability of individual companies depends on efficient operations and the ability to enter favorable contracts with health care providers. Large companies and organizations have advantages in negotiating contracts with providers. Small companies can compete successfully by specializing in types of coverage or populations. The US industry is concentrated: the 50 largest companies generate about 80% of revenue.
Products, Operations & Technology
Major products offered by US health insurance carriers include health maintenance organization (HMO), preferred provider organization (PPOs), point-of-service (POS), and indemnity benefit plans. Companies usually offer a number of such plans and each may operate dozens of them. Of the approximately 90% of Americans covered by health insurance, about two-thirds are covered by private health insurance and about one-third by government plans. Most private policies are employer-based.