With roughly 1.3 billion people and a growing middle class, China is on the brink of a burgeoning healthcare market. And Cigna is making inroads to secure a large share of the business.
The insurer teamed up with China Merchants Bank, a prominent retail lender known for its ability to adeptly handle consumers, when it entered the Chinese market in 2003. And last year, Cigna reported $331 million in revenues, an increase of 32 percent from 2011. What’s more, its Chinese business broke even after operating in the country for only three years, according to Fortune.
Such strong financial performance comes amid healthcare spending in China that’s expected to more than triple by 2015 to $648 billion, with the health insurance market in particular reaching about $15 billion, of which Cigna’s portion could total almost $1 billion, says Ana Gupte, an analyst at Bernstein Research.
Among its ventures in India, Turkey and the Middle East, as previously reported by FierceHealthPayer, “China is the fastest growing asset in our international portfolio,” Cigna CEO David Cordani said.
Key to Cigna’s rise in the foreign Chinese healthcare market is its joint venture with CMB, which uses innovative marketing tactics, including the latest data-mining techniques. And because China’s registration process is lengthy and cumbersome, Cigna isn’t likely to face a lot of competition.
“It’s a great opportunity for them,” Wedbush Securities analyst Sarah James told Fortune. “I don’t see anyone else entering the market there.”
Up next for Cigna is offering employer-based insurance plans to Chinese companies. It has signed deals with 12 more banks, credit companies, airlines and retailers to acquire their customer lists while also establishing a concierge service to help middle-class Chinese consumers deal with the evolving healthcare market.
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