Global Supplemental Benefits
Cigna’s (CI) Global Supplemental Benefits segment accounts for about 9% of the company’s total revenues. It offers supplemental health, life, and accident insurance products primarily in Asia, Europe, and the US. The company either enters into joint ventures with local insurance companies in the international markets or secures licenses to offer insurance services in these markets.
The above graph shows the growth in Cigna’s earnings from global supplemental benefits business. The private health insurance industry (IYH) offers supplemental benefit coverage that involves specified payments for a variety of health risks.
Medicare supplemental plans
Health insurance companies such as Cigna, Aetna (AET), Humana (HUM), and UnitedHealth Group (UNH) offer medicare supplemental plans, called medigap plans, as well as MA (Medicare Advantage) plans. Medigap plans help retirees pay for the deductibles and co-payments as required by MA plans, in exchange for small regular payments called premiums.
In 2012, Cigna expanded into the US medigap and supplemental lines of business through the acquisition of Great American Supplemental Benefit for about $305 million. This acquisition added about 200,000 customers to Cigna’s business portfolio.
Cigna offers its supplemental health insurance products via its distribution partners in foreign markets. These products are sold through various channels such as telemarketing and bancassurance. Bancassurance involves bank partnerships that allow Cigna to offer its insurance products through the bank’s sales channels.
Cigna conducts marketing campaigns by means of various arrangements with banks, credit card companies, financial, and non-financial institutions. Insurance products are also marketed through direct response television, Internet, as well as captive and third-party brokers.