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Anthem: One of America’s Largest Health Insurance Providers

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Apr. 3 2015, Published 8:24 a.m. ET

Overview

With a market capitalization of $42 billion, Anthem (ANTM) is one of the largest insurance providers in the US. The company’s headquarters are in Indianapolis, Indiana. Anthem provides health benefits and services to about 69 million people through its affiliated companies.

Anthem reported revenues of approximately $73.9 billion in 2014. It came 38th in the 2014 Fortune 500 rankings.

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Share price

The above graph shows that Anthem has underperformed its peers Centene (CNC), Humana (HUM), and UnitedHealth Group (UNH), as well as the iShares U.S. Healthcare ETF (IYH).

Centene has performed best, delivering 44.6% on an annualized basis between 2010 and 2015. The company offered a two-to-one stock split in February 2015. Humana, UnitedHealthGroup, and Anthem returned 31.1%, 29.8%, and 20.9%, respectively, between 2010 and 2015.

History

The present day Anthem came into being with a merger between Anthem and WellPoint in 2004. The merged entity assumed the name WellPoint. Structured so that Anthem acquired WellPoint, the deal was completed for a consideration of about $20.8 billion. In 2004, WellPoint was the largest health insurer in the US.

Beyond 2004, WellPoint aggressively expanded its offerings by acquiring companies such as Lumenos, a leader in consumer-driven health plans, and Imaging Management Holdings, a leading diagnostic technology company. WellPoint also made several acquisitions to strengthen its foothold in the Medicare and Medicaid markets.

In December 2014, the company changed its corporate name back to Anthem.

Both the old Anthem and WellPoint could trace their origins to the Blue Cross and Blue Shield organizations—a federation of health insurance companies in 37 states in the US.

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