Aetna 2014 Annual Report Download - page 70

Annual Report- Page 64
In order to remain competitive, we must further integrate our businesses, processes and systems. Pursuing
multiple initiatives simultaneously could make this integration significantly more challenging.
Many of our businesses, processes and systems, both those we have acquired and those we have developed or are
developing, are not integrated, are complex or require disproportionate resources in order to work together
effectively. Businesses, processes and systems that are excessively complex or are not effectively integrated may
adversely affect our ability to compete by, among other things, increasing our costs relative to competitors, reducing
our flexibility and limiting our ability to react quickly to market opportunities or changing circumstances.
Accordingly, we must effectively and efficiently simplify and integrate these businesses, processes and systems to
meet changing consumer and vendor needs and improve our productivity. This task is significantly more difficult
when we pursue multiple transactions or other initiatives, such as significant acquisitions (including the Coventry
acquisition), strategic alliances, joint ventures and multi-year strategic projects (including creating our consumer
business and implementing new provider support programs), simultaneously. Our existing business partnership
relationships and a limited budget of human resources and capital present further challenges.
If we are unable to successfully simplify and integrate our businesses, processes and systems, including those from
acquisitions (such as Coventry, InterGlobal and bSwift), to realize anticipated economic and other benefits in a
timely manner, it could result in substantial costs or delays and adversely affect our business, operations and
operating results.
Sales of our products and services are dependent on our ability to attract and motivate internal sales personnel
and independent third-party brokers, consultants and agents. We may be subject to penalties or other regulatory
actions as a result of the marketing practices of brokers and agents selling our products.
Our products are sold primarily through our sales personnel, who frequently work with independent brokers,
consultants and agents who assist in the production and servicing of business. The independent brokers, consultants
and agents generally are not dedicated to us exclusively and may frequently recommend and/or market health care
benefits products of our competitors. Accordingly, we must compete intensely for their services and allegiance. Our
sales could be adversely affected if we are unable to attract, retain or motivate sales personnel and third-party
brokers, consultants and agents, or if we do not adequately provide support, training and education to this sales
network regarding our complex product portfolio, or if our sales strategy is not appropriately aligned across
distribution channels. This risk is heightened as we create our consumer business and our business model evolves to
include a greater focus on consumers and direct-to-consumer sales, such as competing for sales on Insurance
Exchanges.
In addition, there have been a number of investigations regarding the marketing practices of brokers and agents
selling health care and other insurance products and the payments they receive. These investigations have resulted
in enforcement actions against companies in our industry and brokers and agents marketing and selling those
companies’ products. For example, CMS and state departments of insurance have increased their scrutiny of the
marketing practices of brokers and agents who market Medicare products. These investigations and enforcement
actions could result in penalties and the imposition of corrective action plans and/or changes to industry practices,
which could adversely affect our ability to market our products.
We face a wide range of risks, and our success depends on our ability to identify, prioritize and appropriately
manage our enterprise risk exposures.
As a large company operating in multiple complex industries and in a growing number of countries, we encounter a
variety of risks. The risks we face include, among other matters, the range of industry, competitive, regulatory,
financial, operational or external risks identified in this “Forward Looking Information/ Risk Factors” discussion.
We continue to devote resources to further develop and integrate our enterprise-wide risk management processes.
Failure to identify, prioritize and appropriately manage or mitigate these risks, including risk concentrations across
different businesses (e.g., Insured vs. ASC) industries, segments, customers and geographies, can adversely affect