Business Strategy and Outlook| Julie Utterback, CFA |
Anthem continues to capitalize on its enviable position as the exclusive licensee of the Blue Cross Blue Shield brand in 14 states. We would argue that the Blue Cross Blue Shield brand is the most recognizable and trusted franchise in the U.S. health insurance industry. As the largest Blue Cross Blue Shield operator, Anthem recently overtook UnitedHealth as the largest medical insurer in the U.S. after acquiring a top-tier Medicare and Medicaid insurer in Puerto Rico. Anthem's position is particularly impressive given its limited geographic reach compared with UnitedHealth's national network. Specifically, Anthem's market share dives deep in its license states where it claims average membership share of about 35%. This high local share remains particularly valuable in health insurance since medical-care providers typically only operate in limited geographic areas, making local market share the most relevant to most reimbursement negotiations.