In our previous blog, we talked about the SWOT Analysis of Progressive. This time let’s dig into the SWOT Analysis of UnitedHealthcare.
UnitedHealthcare is the largest healthcare company in the world by revenue and 80% of its revenue is generated through its premiums. The parent company behind the success of UnitedHealthcare is UnitedHealthcare Group. In 1998 they launched six independent business segments, one of which was the UnitedHealthcare of today.
Another aspect that made UnitedHealthcare 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 UnitedHealthcare, let us learn more about UnitedHealthcare the company, founding, products, financial status, and competitors.
UnitedHealthcare is a foundation of UnitedHealthcare Group formed in 1999 which is dedicated to helping people live healthier lives and making the health system work better for everyone. They serve millions of people from their earliest years through their working lives and through retirement.
UnitedHealthcare is an American multinational managed healthcare and insurance company based in Minnetonka, Minnesota. It offers health care products and insurance services. UnitedHealthcare Group is the world’s eighth-largest company by revenue and second-largest healthcare company behind CVS Health by revenue, and the largest insurance company by net premiums.
The United Health Foundation has committed more than $170 million to improving health and health care. With serving about 6.2 million people with medical benefits, UnitedHealthcare is the nation’s largest health insurance company based in the U.S. UnitedHealthcare primarily generates revenue through its premiums, consulting services, and sales of medical products. Of those services it also includes “Optum”, an aggressive secondary business of UnitedHealthcare Group focused majorly on participants in the healthcare industry, providing expertise, technology, and other services.
|Founder||Richard T Burke|
|Origin||The United States|
|No. of Employees||300,000+|
|Market Cap||$433.29 Billion (2022)|
|Annual Revenue||US$285.273 Billion (2021)|
|Net Income/ Profit||US$17.285 Billion (2021)|
Products & Services by UnitedHealthcare
- Health Insurance Plan
- Small Business Healthcare program
- Short Term Insurance
- Dental, Vision, and Supplemental Plan
- Lost job coverage plans
Competitors of UnitedHealthcare
UnitedHealthcare competes on a global level with many other Healthcare Insurance Companies. The top 5 competitors of UnitedHealthcare are:
- CVS Health
Now that we understand the company’s core business, let’s delve into the SWOT analysis of UnitedHealthcare.
SWOT Analysis of UnitedHealthcare
A SWOT analysis determines the strengths, weaknesses, opportunities, and threats of a company. It is a proven management paradigm that allows UnitedHealthcare 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 UnitedHealthcare, refer to the infographics image below
Now first let’s begin with the strengths of the company from the SWOT analysis of UnitedHealthcare.
Strengths of UnitedHealthcare
The unique skills of a company that gives it an edge in gaining more market share, attracting more customers, and maximizing profits are known as its strengths. The following are UnitedHealthcare’s strengths:
- Optum Business: Optum insight is focused on major participants in the healthcare industry, providing expertise, technology, and other services.
- Premiums: 80-85% revenue of the company is generated by insurance premiums which is huge according to other competitors.
- Brand Reputation: UnitedHealthcare Group has existed for about 45 years in the healthcare industry, maintained its image and gained customer trust to some extent.
- Extensive Network: UnitedHealthcare has partnered with more than 1.3 million physicians and care professionals, and 6,500 hospitals and other care facilities.
- Focus on Social Schemes: UnitedHealthcare 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: UnitedHealthcare 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: UnitedHealthcare 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: UnitedHealthcare has gained 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 UnitedHealthcare
Weaknesses are the areas UnitedHealthcare can work upon. Some of UnitedHealthcare’s weaknesses are:
- High Prices: PPO plan premiums are slightly higher than average in some areas.
- 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.
- Medicare Plans: Although there are many 4.5 stars plans the average Medicare star rating is 3.9.
- Delayed Claims: Many states reported the authority of delayed claims payments to policyholders.
- Poor Marketing of Products: UnitedHealthcare was suspended by the federal government from marketing its Medicare Advantage program after it found that the insurer was misrepresenting its product in 2007.
- Research & Development: UnitedHealthcare 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 UnitedHealthcare making it difficult for outsiders to adjust and hence resulting in the loss of talent.
Opportunities for UnitedHealthcare
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 UnitedHealthcare 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.
- E-commerce: With the world going online, UnitedHealthcare can grow on retail landscapes with regard to its OptumRx, OptumHealth, OptuminSight business segments.
- COVID-19 Aid: With covid-19 weakening people’s immune and financial health, they are becoming prone to all other diseases as well and UnitedHealthcare 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 UnitedHealthcare
Threats are those factors that have the potential to provide harm to the organisation in any form. The threats of UnitedHealthcare 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, UnitedHealthcare has lost its luster 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 UnitedHealthcare. Let us conclude our learning below.
The pandemic sure has taught everyone a lesson that precaution is better than cure. Health insurance provides a sense of security knowing that if you get into an accident or contract a serious illness you’ll be taken care of and UnitedHealthcare has been doing this job pretty well for 45 years and counting.
Another great move by UnitedHealthcare is they are expanding themselves online and making changes in the current market structure. The world is moving towards digitalization, companies are looking for fresh talents who are well versed in digital marketing. Hence, a few years down the line, every individual will have to be digitally able to survive in the market. If you go and look on popular job portals you’ll see a whopping number of jobs. In fact, these numbers are expected to grow year on year.
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We hope this blog on the SWOT Analysis of UnitedHealthcare has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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