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Insurance industry

Aetna Inc. Shifts Focus to Healthcare, Preparing for Future Growth

Strategic Insights

— 1 min read

Aetna Inc., the Hartford, Conn.-based insurer, is redirecting its attention to the healthcare industry after shedding its property and casualty business and attempting to sell its life insurance unit. This strategic decision has led to significant growth for the company, with revenues increasing by over 22% last year and income growing nearly 40%. Aetna's acquisition of U.S. Healthcare Inc. two years ago for $8.9 billion has positioned it as the nation's largest managed health-care company, and its planned purchase of New York Life Insurance Co.'s health-care business for $1.05 billion is expected to further enhance its healthcare offerings.

Key Takeaways:

  • Aetna Inc. is shifting its focus to the healthcare industry, shedding its property and casualty business and attempting to sell its life insurance unit.
  • The company's growth has been significant, with revenues increasing by over 22% last year and income growing nearly 40%.
  • Aetna's acquisition of U.S. Healthcare Inc. has made it the nation's largest managed health-care company, with a customer base exceeding 15 million people.
  • The company is moving its Southeast regional operations and 800 employees to a new 210,000-square-foot space in High Point, NC, providing room for expansion.
  • Aetna's aggressive move into managed care has not been without challenges, including difficulties with computer systems and medical claims following the U.S. Healthcare merger.
  • The company is taking a more measured approach with the New York Life purchase to minimize potential problems.

Statistics:

  • Aetna's revenues increased by 22.1% last year (News & Record, 1998 Top 50 companies list).
  • The company's income grew by 39.5% last year (News & Record, 1998 Top 50 companies list).
  • Aetna's acquisition of U.S. Healthcare Inc. was valued at $8.9 billion (source not specified).
  • The company's planned purchase of New York Life Insurance Co.'s health-care business is valued at $1.05 billion (News article, March [no date specified]).
  • Aetna's healthcare membership is expected to exceed 15 million people following the New York Life purchase (News article, March [no date specified]).

Sources:

  • News & Record (1998 Top 50 companies list).
  • News article (March [no date specified]).
  • Source not specified.

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