Earlier, we had explored a complete SWOT analysis of Metlife also known as the house of insurance. This time, we are going to explore the SWOT analysis of Aetna – one of America’s leading health insurance providers.
Aetna is one of the leading and oldest health care benefits companies, serving approximately 46 million people with an objective to help them make better decisions about their healthcare. Aetna has been in the market for more than 160 years.
Over the years, despite technical innovation and development, they managed to keep their position in the market and give strong competition to others only because of a strong marketing strategy. In this modern era, technology and marketing go hand in hand. If you are interested in learning about marketing – check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.
The blog will mainly focus on the strengths, weaknesses, opportunities and threats surrounding Aetna. But before that, let us take a look at the company, its history, products, services and financial success.
A subsidiary of CVS Health – Aetna Inc. is an American health care company based in Hartford, US. The company sells consumer health care insurance and related services, such as medical, pharmaceutical, dental, behavioural health, long-term care, and disability plans, primarily through employer-paid insurance and benefit programs, and medicare. The company is known for its indiscriminate coverage for all individuals enabling them to afford health services.
In 1850, Aetna Insurance Company organised an annuity fund to sell life insurance. In 1853, the Annuity department separated from Aetna Insurance and was incorporated as Aetna Life Insurance Company. The company’s first president was Eliphalet A Bulkeley. From 1899, the company started selling health insurance policies.
The company also has an Aetna foundation helping minorities and low-income groups with their health needs charitably. Its work in the nation has improved the health of individuals by giving them reasonable care plans. In 2021, Aetna won ‘Best Individual International Healthcare Provider’ at the UK Health & Protection Awards for the first time.
The company has 22.1 million medical members, 12.7 million dental members, 13.1 million pharmacy benefit management services members, 1.2 million health care professionals, 690,000+ primary care doctors and specialists, and over 5,700 hospitals to provide affordable service across the nation.
|Founder||Eliphalet Adams Bulkeley|
|Origin||Hartford, Connecticut, U.S.|
|No. of Employees||47,950+|
|Market Cap||US$69.64 Billion (2022)|
|Annual Revenue||US$60.6 Billion (2018)|
|Net Income/ Profit||US$1.9 Billion (2017)|
Products & Services by Aetna
Aetna has operated in the health insurance industry for more than 100 years. The product and services offered by Aetna are as follows –
- Health insurance plans for individuals and families
- Member programs
- Healthcare-related services
Competitors of Aetna
Aetna competes on a global level with many other Healthcare Insurance Companies. The top 5 competitors of Aetna are
- UnitedHealth Group
- WellCare Health Plans
Now that we understand the company’s core business, let’s delve into the SWOT analysis of Aetna.
SWOT Analysis of Aetna
A SWOT analysis determines the strengths, weaknesses, opportunities, and threats of a company. It is a proven management paradigm that allows Aetna to benchmark its business and performance against that of its competitors and the industry as a whole.
This is a great tool for identifying where the business is doing well, where it is failing, developing countermeasures, and determining how the business can grow.
To better understand the SWOT Analysis of Aetna, refer to the infographics image below
Now first let’s begin with the strengths of the company from the SWOT analysis of Aetna.
Strengths of Aetna
Strengths are an integral part of the company that distinguishes the company from its competitors. Aetna has many strengths that enable it to prosper in the market over the years. The strengths of Aetna are as follows
- A subsidiary of CVS Health: Aetna is the subsidiary of CVS Health which in itself is one of the biggest strengths for Aetna because the healthcare institute gets both financial and recognition support from the parent company.
- Reputation & Brand Name: Aetna is the most well-established firm in its industry. It is the world’s largest insurance company which serves more than 10 states with its main customer base of more than 22 Million in the United States and expatriates.
- Focus on Social Schemes: Aetna Life Insurance has long been a supporter of global health plans typically including medical, dental, behavioural and disability. With a variety of world-class services, it leads the industry in health protection and dental plans.
- Highly Skilled Workforce: Successful training and learning programmes have resulted in a highly competent workforce. They are not just highly skilled but also driven to achieve greater success.
- Affordable Insurance: Aetna insurance company is the market leader and serves the people in the United States with insurance that is low in rates but with superior benefits.
- Financial Position: Aetna has a very strong financial position in the market with consecutive profits over the years along with accumulated profit reserves which can be utilised for future expenditures or marketing activities.
- High Level of Customer Satisfaction: Aetna has gained the trust of more than a million clients and has a very strong customer relationship management team through which they keep their current customers very satisfied and also enjoy a good brand equity status among potential customers.
- Strong Supplier Community: It has built a culture among suppliers where the suppliers not only promote the company’s services but also invest in training the consulting team to explain to the client how he/she can extract the maximum benefits out of the insurance services.
Weaknesses of Aetna
Weaknesses are the areas Aetna can work upon. Some of Aetna’s weaknesses are:
- Research & Development: Aetna has a good share of expenditure on the research and development department but it is spending way less than a few of the players within the industry which have benefitted as a result of their innovative products.
- Diversity in the Workforce: The local workers contribute to the majority of the workforce at Aetna making it difficult for outsiders to adjust and hence resulting in the loss of talent.
- Low Market Share: Although the company has a significant presence in the United States, the insurance company is not known to many people due to the company’s low share in the market.
- Customer Service: Given it is the largest healthcare company it is only natural to have so many customers and in some areas, the company fails to provide customer satisfaction.
- Delayed Claims: Many states reported the authority of delayed claims payments to policyholders and increasing policy cancellations.
Opportunities for Aetna
Opportunities are uncontrollable external circumstances that a person may be able to take advantage of. These external factors could give the company an advantage in the marketplace. Opportunities for Aetna are:
- Possibilities in the Online World: Clients’ increasing acceptance of online services will allow Aetna Group to offer innovative services to customers in the Insurance (Life) market.
- Social Media: Over the years the number of active users on social media channels has increased and with this Aetna can make use of its social media handles to promote its products, interact with customers and even provide after-sale services.
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- Future of Insurance Company: Global life premium insurance growth is predicted to rebound to 3% with increased risk awareness owing to COVID-19 and global economic recovery set to accelerate the demand for life insurance products.
- Future Trends: The next 10 years will see the insurance industry moving from traditional to more customer-centric products. In the post-pandemic era, due to personalised services, the products are given based on information collected from external sources and devices.
- Shift From Protection To Prevention: There is a general trend toward risk prevention rather than risk mitigation, which indicates that insurance companies should concentrate on risk prevention rather than risk mitigation.
Threats to Aetna
Threats are those factors that have the potential to provide harm to the organisation in any form. The threats of Aetna are as follows:
- Policies on Slaves: In New Jersey, Aetna issued life insurance policies to slaveowners covering the lives of their slaves. The complaint blamed slavery for present-day disparities between blacks and whites in income, education, literacy, health, life expectancy and crime.
- Lobbying Cases: Aetna had been caught spending more than $2.0 million on lobbying in 2009. Such lobbying and policies on slaves have reduced the goodwill of Aetna in the market.
- Gig Economy: Most organised companies across the world offer group insurance. Various online-based and reputed companies like Fiverr, Amazon Mechanical Turk, and others have entered the ‘freelancer’ population who work without any formal company allegiance. This has resulted in an enormous loss for the insurance companies.
- Competition: Since insurance was privatised, Aetna has lost its lustre and now confronts intense competition from private insurance businesses that have given the industry a new lease on life.
- Changes in Government: Because fiscal and monetary factors vary with each new government, tactics must be altered correspondingly. This results in a slew of issues.
This ends our elaborated SWOT analysis of Aetna. Let us conclude our learning below.
Aetna is a well-known insurance brand with a significant global presence. In the SWOT analysis of Aetna, we observed that the company is heavily reliant and enjoys strong brand recognition and trust with its customers. It has a strong distribution network and has reached across all the markets it serves, but suffers from an increasing number of suppliers in the same space and better R&D efforts by its competitors.
Also, one point not to miss out on is that Aetna is in line with its marketing effort. It has created a customer base for itself by tapping into the digital era and creating a social media presence on several platforms. If you are interested in learning digital marketing, don’t forget to check out IIDE’s 3 Month Advanced Digital Marketing Course.
We hope this blog on the SWOT Analysis of Aetna has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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