Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Ana Gupte – Sanford C. Bernstein
Ana Gupte – Sanford C. Bernstein
I see that your premium yields are pretty healthy and your guaranteed cost even excluding the voluntary is just declining by 1% versus your competitors are seeing some pretty significant declines and projecting pretty significant declines for next year, so can you comment on how much of that you said individual, how much of that is individual and are you seeing stable performance with small groups and why might that be and why are you differentiated relative to what others are seeing.
David Cordani
Relative to guaranteed cost as we noted in our prepared remarks we’re seeing some traction in the individual lines of business. We’re focused on a limited number of geographies so we initially launched five geographies in 2008 and moved to five additional geographies.
Secondly and very importantly we launched leaner benefits that we began selling in mid 2009 and have expectations for improvement there and we’re seeing some good traction in terms of launching leaner benefits for the employer sponsored space.
Specific to small group which the industry typically defines as under 50, that’s a very small percentage of our overall book of business. Think about it at the enterprise less then .50% of our overall membership will fall into that category.
So I would not identify that as a driving force. So to recap, individual traction good, contribution of leaner benefit programs contributing to the employer sponsored space good, with a reasonable balance of improving account retention along with new business sales in what we call our select segment employers between 51 and 250 lives.
Ana Gupte – Sanford C. Bernstein
My follow-up is unrelated, its related to reform and I believe yesterday Kaiser, Intermountain and Geisinger are now suggesting that this fee not only be extended to the fully insured books but also ASO and I wanted to know how you see that playing out, would that be passed on directly to the self insured employers or are the insurers also on the hook for some of that if this does play out that way.
Edward Hanway
It’s a little hard to predict exactly how that’s likely to play out. I would tell you that the one thing we are focused on and working on very diligently is not only the fee but all of the revenue raisers in the bill because the concern we have is that ultimately that will, these charges will ultimately find their way in the premium rates or in the fees and will be passed on.
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