Cigna-Financed and China Merchants Bank-Backed Cigna Life Insurance's Integrated Approach to Health Insurance and Health Management
The health insurance industry is currently at a bottleneck.
In the first five months of this year, the original premium income from health insurance business grew by only 6.14%, whereas in 2015, the premium growth rate for health insurance reached as high as 51.9%.
How Did the Once High-Growth Dark Horse End Up Here? Is It Due to Lackluster Product Innovation and Severe Homogenization? Or Does It Reflect a Need to Enhance Professional Operational Capabilities? Or Perhaps an Overreliance on Entrenched Sales Scenarios and Channels?
Regardless of which specific issue is considered, each has long become a cliché in the health insurance industry, with external stakeholders frequently questioning insurers’ proposed solutions. This has left insurers feeling deeply aggrieved: “We have truly been working very hard.”
Li Peng, General Manager of Cigna & CMB Health Management Subsidiary
Taking product innovation as an example, Li Peng, President of the Health Insurance Division at Cigna & CMB and General Manager of Cigna & CMB Health Management Co., Ltd. (hereinafter referred to as “Cigna & CMB Health Management”), a health management subsidiary under Cigna & CMB, described the situation as follows: “In many cases, it is not that industry players are not striving for innovation. On the contrary, I have observed that the entire industry is making concerted efforts to pursue innovation, whether in products or marketing. Moreover, as healthcare reform—a fundamental driver of innovation and even overall development in the health sector—continues to strengthen, the opportunities and incentives for innovation in health insurance are still increasing.”
Of course, strong momentum must be aligned with the right direction to achieve synergistic effects. It is worth noting that in exploring this direction, domestic health insurance companies are increasingly grasping the key elements—for instance, the rise of insurtech has injected external technological power into the design, operations, and even marketing of health insurance products. However, in many other areas, numerous health insurers still struggle to identify the correct strategic focus.
For example,The organic integration of health insurance and health management is widely recognized as a key industry trend and is considered one of the most important directions for innovation in health insurance. However, to this day, health management services have largely been reduced to ancillary benefits and promotional tools for most health insurance products, serving merely as peripheral “gimmicks.” They have failed to fulfill their multiple potential roles, such as assisting in cost containment, enhancing user experience, and even transforming the operational logic of insurance businesses.
So, are there really no successful cases in the industry to draw upon?
Li Peng disagrees: “In the past, when the industry explored and focused on the professional development of health insurance, it somewhat neglected high-end medical insurance.”“In fact, among all health insurance segments in China, the high-end medical insurance market was the first to enter a phase of specialized operation and has become relatively mature in terms of competition. In this market, competition is no longer driven by price, but by professional operational capabilities—or, more accurately, by the underlying service delivery and cost-control capabilities, both of which are closely linked to health management.”
Therefore, in the high-end medical insurance market, we may glean some insights into the deep integration of payment and services. In this sector, Cigna & CMB, which comprehensively inherits Cigna’s health insurance operational capabilities from the United States, stands as a representative player.
Thus, let us take Cigna & CMB as a case study to dissect the secrets behind its integration of health insurance and health management.
Cigna & CMB's "genes" are somewhat unique. ItThe birth of this entity stems from the partnership between Cigna Group and China Merchants Bank.
Cigna Group, one of the four largest commercial health insurance companies in the United States, has become a giant in the U.S. healthcare industry following its merger with Express Scripts. Its global medical resource network spans more than 30 countries and regions, encompassing over 1.5 million global healthcare partners, more than 260,000 mental and behavioral health care institutions, and 65,000 contracted pharmacies.In the first half of 2023, Cigna Group achieved revenues of $95.1 billion.
Other ShareholderChina Merchants Bank, the first joint-stock commercial bank in China wholly held by corporate legal persons, reported a revenue of RMB 178.5 billion in the first half of 2023.
If we sayCigna Group and China Merchants BankIf we were to identify what these entities have in common, the one that ranks first would undoubtedly beBoth are Fortune Global 500 companies.
andDue to the strong influence of its shareholder, Cigna Group, CMB Cigna, established in 2003, began at an early stage to focus on the impact of health management services on both health insurance products and customer segments, thereby initiating its strategic layout in the health management sector—
In 2009, Cigna & CMB launched its high-end medical insurance business and initiated health services related to high-end medical care;
In 2017, to further strengthen its specialized operations in health insurance and enhance health service capabilities, Cigna & CMB established a wholly-owned health management subsidiary to undertake the professional operation of high-end medical insurance and provide health management services.
From 2009 to 2017 and then to 2023, Cigna & Merchants Health Insurance has undergone three iterations in its understanding of health services, and its development strategy of “health insurance + health management services” has similarly experienced three iterations.
At Phase 1.0, Cigna & Merchants Bank Insurance has found that the high-end medical insurance market it has entered, and the high-net-worth individuals it serves, inherently have substantial healthcare needs. Therefore, at this stage,Cigna & CMB began to provide certain medical and health services to meet customer needs, integrating them with its health insurance offerings.
The most significant improvement of Version 2.0 over Version 1.0 lies in the expansion of the target customer base for health services—The customer base has gradually expanded from Cigna & CMB Health Insurance clients to include other Cigna & CMB customers, China Merchants Bank clients, and high-quality corporate clients, with a focus on high-net-worth individuals and premium enterprises. To date, these segments have become the primary clientele for Cigna & CMB’s health services.
The relative stability of its customer base has brought Cigna & CMB not only stable and substantial revenue from its health services business, but more importantly, it has enabled the company to continuously gain insights into the “needs” of its target customers. Cigna & CMB has indeed seized this opportunity, leveraging it to gradually transform its service model from reactive to proactive.
It is important to emphasize that,During Phase 1.0 and Phase 2.0, although Cigna & CMB Health Management had begun to gradually provide corresponding medical health management services to customers, these services were still delivered on an as-needed basis. At this stage, Cigna & CMB Health Management continued to play a passive role in the provision of medical health management services.
At the 3.0 stage, “drawing on over a decade of service experience, we have gained increasingly clear insights into our customers’ health needs, and have a better understanding of the role we are best suited to play, where we should focus our efforts, and how we should build our own healthcare ecosystem.”“Li Peng stated as such during the interview.”
Meanwhile, Li Peng emphasized: “Since Cigna & CMC first entered the health management sector, its goal has remained unchanged, namely to continuously build professional operations for health insurance and extend into medical and health services. The iterative process of the three strategic versions has only clarified the measures to achieve this goal and yielded more pronounced results.”
As of now, health services—including health consultations, medical access assistance, health management, pre-authorization, and case management—have been fully integrated into the operations of Cigna & CMB Health Insurance.Cigna & CMC’s wholly-owned health management subsidiary has persisted in integrating health insurance operations with the provision of health management services, a strategic decision that is also closely tied to the professional influence of the Cigna Group.
“You can clearly see that in recent years, the overseas health insurance industry has witnessed frequent mergers and acquisitions targeting healthcare companies. The underlying reason is that overseas health insurers have come to realize that health insurance itself may well be an integral part of health management services,” said Li Peng.
The experience of mature overseas markets has profoundly influenced Cigna & Merchants, reinforcing its conviction that the deep integration of health insurance operations with medical and healthcare services can generate positive synergies. First, the health management subsidiary of Cigna & Merchants has achieved an average annual growth rate of over 60% in its health services business over the past three years. Second, Cigna & Merchants has realized cost-containment results of nearly 10% related to medical and healthcare services. Third, Cigna & Merchants has earned trust and recognition from the market.
Meanwhile,According to Li Peng, Cigna & CMB’s positioning in the broader health sector is not limited to insurance business per se; rather, it serves as a provider of comprehensive solutions addressing customers’ holistic health needs, encompassing both payment solutions such as health insurance and health service solutions.
In building its health service system, CIGNA & CMB Health Management Subsidiary has made substantial efforts.
Just as the field of healthcare is vast, medical and health management services are equally diverse. This broad scope and wide variety present healthcare management companies with their first critical challenge: determining which services to offer to which customer segments?
For Cigna & CMB Health Management, the first issue has clearly been resolved—with the target customer segments identified, the next step is to deliver health management services that precisely match their needs.
In this regard,Li Peng stated that for individual users, the key needs are bridging professional information gaps, access to medical resources, and continuous medical services; for enterprise users, the primary demands center on professional and extended services related to health examinations, population-based health risk control, and health services for employees’ family members to alleviate concerns.
Based on precise insights into target customer needs and leveraging 20 years of experience serving high-net-worth individuals and corporate clients,Cigna & CMB Health Management Subsidiary Has Built a Pyramid-Structured Service Capability System.
Among them,The base of the pyramid is referred to as the Resource Network Layer, which serves as a concrete manifestation of one of the strategic positioning pillars for health management services proposed by Cigna & CMB Health Management Subsidiary—namely, the “Integrator of High-Quality Medical Resources.”
At this level, leveraging Cigna Group’s global healthcare resources and influence, China Merchants & Cigna Health Management Subsidiary integrates and connects high-quality healthcare resources across various fields in China and around the world, aiming to provide users with comprehensive and premium healthcare services.
As of now, CIGNA & CMB Health Management’s subsidiary has established a nationwide healthcare service network spanning “100 cities, thousands of providers, and tens of thousands of outlets”—a comprehensive healthcare resource network covering 276 cities, comprising nearly 100 partner health service enterprises, more than 1,000 directly affiliated medical institutions, and close to 30,000 various health service outlets. AndAbroad, building on Cigna Group’s global medical network of 1.5 million providers, CMB Cigna Health Management has established an overseas service network offering international health check-ups, global medication sourcing, and direct access to top-tier hospitals.
Level 2 of the Pyramid – The Foundational Capabilities Layer, which concretely embodies its positioning as a “Full-Cycle Health Management Service Provider.”While striving to provide users with comprehensive medical and health services, Cigna & CMB Health Management Subsidiary has also keenly identified customers’ core needs—medical care resources, disease management, health stewardship, elderly care and nursing, and corporate health services. Leveraging its professional expertise, the company has established the apex of its service pyramid: a solutions layer comprising five distinct solutions.
Among them, Dr. Nuo serves as a private health butler and personal physician, entitled to the “Five Exclusive” services: dedicated butler, personalized records, professional guidance, specialized check-ups, and expert teams. Covering diverse health management scenarios such as health maintenance, prevention, medical consultation, and rehabilitation, Dr. Nuo is committed to becoming a lifelong healthcare manager and companion for clients.“Health stewardship is not just a service; it is also a key customer engagement model for the future of financial institutions,” said Li Peng.
Nuo Wuyou is a solution for continuous care targeting single diseases, encompassing prevention and early screening, formulation of treatment plans, and linkage to hospital and pharmaceutical resources, as well as providing professional guidance on rehabilitation and nutrition during treatment and home-based recovery.“The ability to manage specific diseases best reflects the professional strength and depth of a health management company,” stated Li Peng.
Nuo Huanyu leverages the global medical resource network established by Cigna & CMB Health Management Subsidiary to provide customers with highly matched, convenient, and professional healthcare solutions that offer direct access to medical services across China and worldwide, significantly enhancing the customer healthcare experience.
“In practice, although we consciously guide users to identify their health needs beyond medical consultations during our service delivery, frankly speaking, the most pressing demand among Chinese residents for health management services remains centered on the medical consultation process,” said Li Peng.
andNuoxiangshou is designed specifically for the elderly population. Compared with industry-standard elderly care service models, it places greater emphasis on the health needs of older adults.
Furthermore,Given that Cigna & CMB Health Management’s subsidiary serves a client base that includes nearly 200 high-quality corporate clients, it has also launched the “Nuo Qi Kang” solution. This solution applies population health management principles to manage employee health at the corporate level, while also providing flexible, customized services tailored to the personalized health management needs of employees at all levels. It offers a comprehensive range of medical service solutions, supported by health stewards, an online healthy lifestyle platform, and a robust integrated service system, thereby helping enterprises effectively attract and retain talent.
According to Li Peng, the health services business of Cigna & CMB Health Management’s subsidiary has served 2.3 million individual clients, more than 200 enterprises, and over 200,000 corporate employees.
Overall,The sources of Cigna & CMB’s advantages in the integration of health insurance and health management can be summarized as follows—
First, deeply internalize the concept of integrating health insurance with health management at the cognitive level., adhering from the outset to the principle that health insurance is an integral part of health management services, with the two being inherently unified, rather than treating health management services as a mere adjunct or marketing gimmick for health insurance products.
Guided by this philosophy, Cigna & CMB Health Management Subsidiary continues to delve deeply into customers’ true needs for health management.Precise understanding and matching of customers’ health management needs constitute the second competitive advantage of Cigna & CMB Health Management Subsidiary, and can even be regarded as its core competitiveness.
Behind this capability are two solid pillars of support—one being the backing from China Merchants Bank.This not only provides support for the business development space of Cigna & CMB Health Management Subsidiary, but also enables it to continuously gain insights into and grasp customers’ health management needs; whereasCigna Group has matched this insight into customer needs with a global healthcare resource network, enabling the fulfillment of clients’ international health needs. Furthermore, Cigna’s proven success in delivering health services in the U.S. market has directly provided a template for China Merchants Cigna Health Management’s domestic practices, which can be regarded as a replica or localized version of Cigna Group’s model.
Thus, we have arrived at the moment to reveal the answer to this question: What valuable insights can Cigna & CMB’s experience offer to the industry?
Some may argue that Cigna & CMB operates in the relatively niche market of high-end medical insurance and high-net-worth clientele, whose characteristics differ significantly from those of other health insurance segments. Consequently, its success in this segment holds no reference value for other market segments.
However, VCBeat believes that,The underlying logic behind the success of Cigna & CMB’s health management services has nothing to do with premium levels or specific customer segments; rather, it lies in its clear answers to three industry-wide questions: Who are the target customers? What are their actual needs? And can the services provided precisely match those user needs?
As Li Peng stated, “Our prioritization of high-net-worth individuals and the premium market is partly due to the fact that this group’s demand for health services and health insurance is more mature than that of the general population; their needs foreshadow and represent the future direction of market demand.”
However, it is always easy to talk about it, but difficult to do it. As Li Peng said: “At present, although some innovative trends have emerged in the industry, such as the exploration of health insurance products for people with pre-existing conditions, butIn the long run, the focus of health insurance innovation will gradually return to the core market of medical insurance products. In these ‘main battlegrounds’, what truly faces the test is the professional operational capability of health insurance companies, including their health service capabilities, cost-control capabilities, and integration capabilities with the healthcare system.These capabilities require sustained, long-term accumulation within businesses that have already established specialized operational demands, and cannot be achieved through rapid, short-term efforts.