Cigna CEO David Cordani believes his company differentiates itself through its Select Segment.
“Employers and individuals increasingly recognize that health insurance’s traditional role of financing sickness is no longer sufficient,” Cordani said during the company’s third-quarter financial results call on Thursday according to a Seeking Alpha transcript. “By aligning the incentives of clients, customers, and physicians, Cigna is delivering differentiated results. We’ve spoken about physician engagement before, and today, we’re going to focus on client engagement via our Select Segment.”
More than 60% of covered workers in the U.S. are in plans that are completely or partially self-funded, Cordani explained.
“While the vast majority of large firms participate in these plans, currently, there is much lower adoption rate for smaller firms,” he said. “This represents a significant opportunity for Cigna, given the proven differentiated value we are delivering, fueled by our broad capabilities in this space. Our approach integrates a broad array of innovative specialty health services, along with our base medical offerings that ultimately lead to better health outcomes and differentiated results. The opportunity to provide value is clear as our customers and clients confront an array of challenges related to affordability, predictability, and health status.”
One of Cigna’s fastest-growing self-funded target markets is Select Segment, a historically underserved market segment, where the company customizes solutions for employers with between 51 and 250 employees.
“The employees in the Select Segment constitute approximately 25 million lives of the 160 million employer life market,” Cordani explained. “To effectively serve this segment, we apply our unique health and risk management capabilities to deliver customized solutions that ultimately drive savings for employers and their employees, while effectively managing overall health and medical outcomes, as well as employee productivity. And as for results, we have consistently delivered an industry-leading medical cost trend. For example, below 5% over the past few years.”
Cigna’s actionable, company-specific clinical reports and wellness program data help Select Segment clients understand how their employees are using medical benefits.
“We help clients focus on prevention and health improvement by tailoring services such as health coaching and awareness, as well as support programs, including on-site biometrics and care management solutions, which is unprecedented in the small employer space, and which helps individuals maintain and improve their health, while also assisting with the recovery when they confront illness,” Cordani explained. “The results here are clear, increasing demand for expertise in designing flexible, transparent plan offerings for these employers has driven mid-teens organic customer growth on an average annual basis over the last five years in this segment. Today’s low market penetration of self-funded solutions in the Select Segment, which represents about 25%, coupled with the market proof points and value delivery of our innovative approach, presents a significant and exciting opportunity as we look to the future. This business is a great example of the type of growth that we expect to see over the long term in our commercial health care business.”