Cigna 2009 Annual Report Download - page 31

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Markets and Distribution
CIGNA HealthCare offers products in the following markets:
x national accounts, which are multi-site employers generally with more than 5,000 employees;
x middle market, which is generally defined as multi-site employers with more than 250 but fewer than 5,000 employees, and
single-site employers with more than 250 employees;
x “Select,” which generally includes employers with more than 50 but fewer than 250 employees;
x small business, which generally includes employers with 2-50 employees;
x individuals;
x government, which includes employees in federal, state and local governments, primary and secondary schools, and colleges and
universities;
x Taft-Hartley plans, which includes members covered by union trust funds;
x seniors, which focuses on the health care needs of individuals 50 years and older;
x voluntary, which focuses on employers with hourly and part-time uninsured employees; and
x emerging markets, which includes non-CIGNA HealthCare payors to which leased network and other services are offered.
To date, the national and middle markets have comprised a significant amount of CIGNA HealthCare’s business. With the
acquisition of Great-West Healthcare, the “Select,” small business, and emerging markets now constitute a larger share of CIGNA
HealthCare’s business than before the acquisition.
CIGNA HealthCare employs sales representatives to distribute its products and services through insurance brokers and insurance
consultants or directly to employers. CIGNA HealthCare also employs representatives to sell utilization review services, managed
behavioral health care and employee assistance services directly to insurance companies, HMOs, third party administrators and
employer groups. As of December 31, 2009, the field sales force for the products and services of this segment consisted of
approximately 880 sales representatives in approximately 110 field locations.
Competition
CIGNA HealthCare’s business is subject to intense competition, and industry consolidation has created an even more competitive
business environment. While no one competitor dominates the health care market, CIGNA HealthCare expects a continuing trend of
consolidation in the industry given the current economic and political environment.
In certain geographic locations, some health care companies may have significant market share positions. A large number of
health care companies and other entities compete in offering similar products. Competition in the health care market exists both for
employers and other groups sponsoring plans and for the employees in those instances where the employer offers its employees the
choice of products of more than one health care company. Most group policies are subject to annual review by the policyholder, who
may seek competitive quotations prior to renewal.