Aetna 2014 Annual Report Download - page 68

Annual Report- Page 62
need to diversify the sources of our revenue and earnings and transform our business model, including through
creating a consumer business, making investments in consumer engagement capabilities and our Healthagen
technology and other services for health systems and provider organizations (including ACOs and collaborative
provider networks), optimizing our business platforms and expanding internationally.
Achieving these goals will require us to devote significant senior management and other resources to acquisitions or
other transactions and to develop internally or acquire new products, solutions and technology before any
significant revenues or earnings are generated from such initiatives. If we are not able to acquire and/or develop and
launch new products and solutions, including internationally, our ability to profitably grow our business could be
adversely affected.
We may not be able to effectively manage our general and administrative expenses to competitive levels, which
may reduce our membership or profitability, or we may need to implement expense reduction measures that
adversely affect our future growth potential.
Our operating results depend in part on our ability to manage our general and administrative expenses to
competitive levels while delivering improved customer and member service and expanding our marketplace
presence and accomplishing our strategic initiatives, including creating a consumer business. Controlling general
and administrative expenses is particularly important in our Health Care businesses that are subject to regulatory
changes that may restrict our underwriting margins, such as minimum MLR requirements. We have significant
fixed costs, and our ability to reduce variable costs in the short term is limited. We attempt to manage general and
administrative expenses by, among other things, reducing the number of products we offer and controlling costs for
salaries and related benefits, information technology and other general and administrative costs. However, we may
not be successful in achieving the intended benefits of the cost-cutting initiatives we undertake. In addition, these
cost saving measures may adversely affect our ability to implement Health Care Reform and other regulatory
requirements, attract and retain key employees, maintain robust management practices and controls, implement
improvements in technology and achieve our strategic goals, including profitable membership growth. Given the
foregoing, we can provide no assurance that we will be able to manage our general and administrative expenses to
competitive levels, which may reduce our membership, profitability and operating results and adversely affect our
business and future growth potential.
We are dependent on our ability to recruit, retain and develop a very large and diverse workforce. We must
transform our culture in order to successfully grow our business.
Our products and services and our operations require a large number of employees, and a significant number of
employees have joined us in recent years as a result of our acquisitions and our entry into new businesses. Our
success is dependent on our ability to transform our culture, engage our employees and inspire our employees to be
open to change, to innovate and to maintain consumer-focus when delivering services to our customers. Our
business would be adversely affected if we fail to adequately plan for succession of our executives and senior
management, effectively recruit, integrate, retain and develop key talent and/or align our talent with our business
needs, particularly given the current environment, which is rapidly changing. While we have succession plans in
place and we have employment arrangements with a limited number of key executives, these do not guarantee that
the services of these or suitable successor executives will continue to be available to us. In addition, as we expand
internationally, we face the challenge of recruiting, integrating, educating, managing, retaining and developing a
more culturally diverse workforce.
We have experienced cyber attacks. We can provide no assurance that we will be able to identify, prevent or
contain the effects of such attacks or other cybersecurity risks or threats in the future.
We have experienced a variety of cyber attacks, and we expect to continue to experience cyber attacks going
forward. Among other things, we have experienced automated attempts to gain access to our public facing
networks, brute force and distributed denial of service attacks, attempted virus infections, mass reconnaissance
attempts, malware or injection attempts, phishing, PHP injection and cross-site scripting. Although the impact of
such attacks has not been material through December 31, 2014, we can provide no assurance that we will be able to