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Elaborated SWOT Analysis of Humana – American Health Insurance Company

by | Case Studies | 0 comments

In our previous blog, we talked about the SWOT Analysis of Progressive. This time let’s dig into the SWOT Analysis of Humana.

Humana was first started as a nursing home and hospital in the years between 1961 – 1983, lawyers David A Jones Sr.and Wendell Cherry founded a nursing home company (Humana). The main aim of the company is to provide health services to people where they feel homely and satisfied with the service.

Humana not only provides health services but also has a health insurance plan; that’s why the company ranked top 41 in 2021 on the fortune 500 lists which made the highest rank by revenue. It has been the fourth-largest health insurance provider in the nation.

Another aspect that made Humana the giant it is now, is its marketing efforts. As the world goes online, marketing is changing and if you are interested in learning about the latest – check out our Free Masterclass on Digital Marketing by the CEO and Founder of IIDE, Karan Shah.

But, before we begin with the SWOT Analysis of Humana, let us learn more about Humana the company, founding, products, financial status, and competitors.

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About Humana,

SWOT Analysis of Humana - Humana

Humana is based in Louisville, Kentucky. The company was founded in 1961 on August 18th as Extendicare Inc. Then in late 1972, the corporate name was changed to “Humana” which aims to be as unique as humans, to change the perception of ‘warehousing’ or indifferently treating people.

By providing health services, it also grew as a business. When American Mediacorp Inc took over Humana it doubled its revenue and thus set the record of the ‘world’s largest hospital company in the 1980s’. As the American healthcare system changed in the 1980s, “one of its hospitals in Arizona lost a contract with the largest health maintenance organization in the area and Humana created its health insurance plan”.

Humana Inc. engages in the provision of health insurance services. The firm operates through the following segments: Retail, Group, and Specialty and Healthcare Services. The retail segment consists of products sold on a retail basis to individuals including medical and supplemental benefit plans such as Medicare, and State-based Medicaid contracts. 

The Group and Specialty segment contain employer group fully-insured commercial medical products and speciality health insurance benefits marketed to individuals and groups including dental, vision, military services, and other supplemental health & voluntary insurance benefits.

Quick Stats on Humana
Founder Lawyers David A. Jones Sr. & Wendell Cherry
Year Founded 1961
Origin Louisville, Kentucky, U.S.
No. of Employees 48,700+
Company Type Public
Market Cap US$54.57 Billion (2022)
Annual Revenue US$77.155 Billion (2020)
Net Income/ Profit US$3.367 Billion (2020)

 

Products & Services by Humana

Most of us will be looking into the quality products and services provided by the company and checking the reviews of the customers; so here is the wide range of insurance, products, and services offered by Humana;

  • Medical plans
  • Individual Dental and vision plans
  • Group Dental and vision plans
  • Life insurance plans


Competitors of Humana

Humana competes on a global level with many other Healthcare Insurance Companies. The top 5 competitors of Humana are

  • Aetna
  • Cigna
  • United health group
  • Anthem
  • CVS Health
  • Molina healthcare


Now that we understand the company’s core business, let’s delve into the SWOT analysis of Humana.


SWOT Analysis of Humana

A SWOT analysis determines the strengths, weaknesses, opportunities, and threats of a company. It is a proven management paradigm that allows Humana 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 Humana, refer to the infographics image below

SWOT Analysis of Humana - SWOT Infographics of Humana

Now first let’s begin with the strengths of the company from the SWOT analysis of Humana.

Strengths of Humana

  • Hospital Operator: Humana is one of the largest hospital operators in the United States with more than 77 hospitals owned by the company starting from the year 1991.
  • Optum Business: Optum insight is focused on major participants in the healthcare industry, providing expertise, technology, and other services.
  • Brand Reputation: Humana Group has existed for about 60 years in the healthcare industry, maintained its image and gained customer trust to some extent.
  • Focus on Social Schemes: Humana has long been a supporter of global health plans typically including medical, health insurance & wellness services. With a variety of world-class services, it leads the industry in health protection and wellness 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: Humana 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: Humana 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: Humana 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.


Weaknesses of Humana

Weaknesses are the areas Humana can work upon. Some of Humana’s weaknesses are 

  • Customer Service: Given it is the second-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.
  • Research & Development: Humana 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 Humana making it difficult for outsiders to adjust and hence resulting in the loss of talent.


Opportunities for Humana
 

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 Humana are

  • 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 personalized 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.
  • COVID-19 Aid: With covid-19 weakening people’s immune and financial health, they are becoming prone to all other diseases as well and Humana can curate specific health plans for them. 
  • New Clients: Collaborate with more telemedicine providers and expand the health care network for people from the comfort of their homes.


Threats to Humana

Threats are those factors that have the potential to provide harm to the organisation in any form. The threats of Humana are as follows:

  • Information Breaches: Being one of the largest companies with the sensitive data of millions of people makes it a nice target for hackers and breachers. 
  • Gig Economy: Most organized 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 privatized, Humana 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 Humana. Let us conclude our learning below.

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To Conclude

Humana is a well-known insurance brand with a significant global presence. In the SWOT analysis of Humana, 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 Humana 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 Humana has given you a good insight into the company’s strengths, weaknesses, opportunities and threats. 

If you enjoy in-depth company research just like the SWOT analysis of Humana, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of Humana in the comments section below.

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

Aditya Shastri

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