Last week, we saw a good example of a health insurance carrier, Aetna, that exemplifies the “average”: typical commissions, straight spread across market sizes, and diverse geographical coverage. This week we’re going to look at the smallest of the top 5: Anthem.
Anthem (or Wellpoint, take your pick) spun off from American General in the 1980s.
It would seem that Anthem has avoided the Northwest CONUS for greener pastures. Despite heavy concentrations in neighboring states, they are conspicuously absent from New Hampshire, West Virginia, South Carolina, and an odd band around Texas and Louisiana. This anomaly is likely due to their relationship with Blue Cross Blue Shield.
Anthem’s spread on participants is very similar to Aetna’s, but overall their total market share is less than half. It’s clear that they have chosen to focus their efforts on the largest policies.
Now we’re getting somewhere. Anthem copies Aetna’s steadily rising curve, but for some reason controls a much larger portion of the extremely small policy market relative to their middle-sized. I again wonder how much the whole BCBS thing comes into play, here.
Anthem has the second-highest commissions per policy of any of the carriers (just $50 below United for a grand total of $52,941.58 per policy on average). In terms of commission on the premium dollar, however, they’re tied in second place with United and Aetna at 3 cents.
The bottom line is that, with a few exceptions, Anthem is just a smaller version of Aetna in terms of market control, albeit with much better commissions.
Next week: we examine Cigna, the undisputed ruler of the midsize.