Summary of the case
CIGNA Company started in 1982 as a health insurance provider in the United States. The company is now the fourth-largest provider of health services in the country. CIGNA is expanding its services to include other countries around the world. The health care services are aimed at improving the health, well-being and security of the people it serves (CIGNA, 2009). The company is boasting of different awards for its various innovative processes in improving service delivery to its clients. The company gets its returns primarily from premiums, charges, mail order pharmacy, and other different income sources. CIGNA Corporation functions in health care, disability and life, international expatriate benefits, and runoff business segments (Global Business information, 2009, para.1). The company is now focusing on the rising consumer-directed health plan market to improve its development.
The problem faced by CIGNA
Despite its rich tradition of provision of quality service, CIGNA has been experiencing a major managerial problem. The company management lacked adequate expertise to cushion it from business environment pressures. For example, in 2002, the company experienced increased competition from business rivals such as Blue Cross Blue Shield, Aetna, Humana, and United Health Group, which made it realize $500 million net loss and up to 40 percent decrease in stock price. This lack of management expertise was also evident when thousands of doctors across the United States sued it for supposed delays in payments for the care of patients. The physicians accused the company management of willfully withholding patients’ benefits and unreasonable rejection of claims to cut on costs. Besides, the company sales team failed to develop the new EC systems that were meant to improve its service provision to customers. More to the point, the company’s management posted disappointing returns that made them to be under intense pressure to practice cost reduction strategies.
Solution to the problem
CIGNA can adopt a number of strategies to improve its management expertise. In order to out-perform the competitors, the company should realize that it is not enough to be an innovator anymore, but to out-innovate the business rivals in the market. This will ensure that they maintain the lead in the insurance industry. To fill the communication gap that existed between CIGNA and its clients, the company should consider consolidating and upgrading its antiquated IT systems to Web-based EC systems. This will improve its customer relation management strategies and reduce the many cases of accusations that it had to deal with in the past. Development and implementation of the new systems will cut costs and improve the company’s earnings, as members would now carry out different activities at the click of the button. The new systems would also give doctors the opportunity of getting access to the member’s interactions with the company and give answers to their questions.
Learning application
The proposed solution of improving CIGNA’s management expertise is workable. In practicing out-innovation strategies, the company would realize increased growth to its profits hence compete favorably in the insurance industry. Although the migration to the new EC systems might not be smooth, an increased number of the company’s members can be able to move to the new platforms much faster. The online portal created on the company’s website can be a fundamental tool in ensuring easier interactions between the members or their representatives with the company staff. Thus, CIGNA’s management expertise would improve and it will be able to fulfill its service orders and develop its customer relation management strategies.
Reference List
CIGNA. (2009). It’s time to feel better. CIGNA Corporation. Web.
Global Business Information. (2009). CIGNA Corporation Overview. OnceSource. Web.