Question

In July 2015, health insurance company Anthem announced that it would buy rival insurer Cigna for $48.3 billion. What are your views about such major health insurance companies' mergers and acquisitions? Discuss two potential impacts of these mergers for hospitals whose primary source of patient care reimbursement are these health insurance companies in the United States.

Answer 1

Answer:- In July 2015, health insurance company Anthem announced that it would buy rival insurer Cigna for $48.3 billion.
- the merger and acquisition of these major health insurance companies will lead:-
(a) the search for growth in a low interest rate environment, combined with excess capital and regulatory developments, has prompted insurers to seek inorganic growth opportunities via mergers and acquisitions (M&A) within domestic and international markets.
(b) driving the increase in M&A include increased market share, entry into new markets, a desire to divest non-core operations and a heightened concern about regulatory changes.
(c) The need to invest in technology, digitization and data analytics is another emerging driver that is helping improve sales, customer service and distribution efforts. With continued economic and regulatory uncertainty, acquisition within the life and health insurance industry is expected to accelerate in the near future.