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Health Insurers Go Global

Elyas Bakhtiari, for HealthLeaders Media, July 21, 2010

When Cigna Corp. CEO David Cordani talked about the “cornerstone” of his company’s growth strategy in a recent Forbes interview, he didn’t single out the individual market or employer-sponsored insurance as the primary drivers of expansion--at least, not in the U.S.

It was markets beyond U.S. borders that he described as having outstanding growth opportunities when he said that the company was “going global with the Cigna franchise.”

That may be one reason Cigna announced this week the appointment of an executive to head up the health, life, and accident operations of Cigna International. Based in Hong Kong, the new position will be responsible for expanding business in the 26 countries other than the United States where Cigna currently does business.

While there is still room for growth in the U.S. health insurance industry, particularly with a new mandate to purchase insurance set to go into effect in 2014, international markets may play a large role in the expansion strategies of some of the largest companies in the near future.

Ex-patriot Americans make up a portion of the international market, but the real growth will likely come from within other nations. Cordani identified two major trends that he hopes will drive the international business.

First, individuals are purchasing supplemental insurance products in addition to their primary (often government-run) insurance. He envisions these supplemental packages expanding into more comprehensive services as markets change. That’s why it’s important to start building relationships with the customers now.

“Somebody might buy a hospital coverage. They might buy a surgery coverage. They might buy a cancer coverage. They're slices now. But they will evolve ... as the market evolves, to more comprehensive coverages,” Cordani said.

The second trend is happening on the employer side, as companies in rapidly growing countries, like China, are increasingly competing for talent and, like employers in the U.S., want to use health insurance as a recruiting tool.

“The reason why they want to opt out of the system is because while everybody has access to care in the system, they're struggling to get accessibility to the highest-quality physicians or hospitals. So we see that change as an area where we could add significant value,” Cordani said.

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