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<p align="justify">Humana; is a Kentucky based American Health insurance company. The company was founded in 1961 as a Nursing home; in 1972, the company acquired hospitals and in the 1980&#8217;s company introduced its health insurance plan. The company operates through three segments, Retail, Group and Specialty, and Healthcare Services (Forbes, 2021). The healthcare segments offer services such as clinical care and pharmacy solutions. The retail part provides retail products such as Medicare contract. The group and specialty provide complete health insurance plans such as dental, vision and other programs to corporate groups and individuals. Porter&#8217;s five forces model is a valuable tool to identify threats and opportunities faced by Humana in the health insurance sector in the United States.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">The health insurance market in the US is highly concentrated. The market is dominated few companies. According to American Medical Association, In 15 states, there is one company with more than 50% market share (AMA, 2020). Competition reduced in the industry because of the merger of few companies. The last decade saw one of the significant mergers as UnitedHealth and Sierra in the Nevada region. Health insurance is a good business with decent profit margins. According to a report of the American Congress, as of 2019, around 90.8% of the US population has health insurance (Congressional Research Report, 2020). Humana is considered as the part of the prominent three health insurance provider in the country. In 2019, it provided cover to more than 8.4% in the US (Statista, 2020). The company does not face any serious competition in the market. The industry is concentrated, and it enjoys the benefit of it.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The health insurance sector is a complex network of departments in the US. The products offered in the industry are pretty much identical from the last few decades. The industry is evolving and using technology to innovate better outcomes for the customer. Fintech and insurtech are the future of the financial sector. Industry runners as developing tools with the help of machine learning and artificial intelligence to provide a customized and better solution for the client. Humana is leading this moment and streamlining the process. It uses AI to develop digital tools, streamlining the process and reducing the timeframe to process and save human resources. (Forbes, 2020). The threat against is low compared to other industry runners.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The new entrants must come with new innovative products to disrupt the industry front runners. The rise of fintech and insurtech, changes in human behavior and advancement of technology is disrupting the current insurance market (Deloitte, 2021). The insurance industry requires strict higher initial investment and strict compliance set up by regulators. It is a significant hindrance for the startup. The financial industry is closed, and regulators keep a strict eye on it. Fintech startups are developing tools that can help the industry. Those startups are developing products, which can help the new entrants in bringing new products in marker. The threat level at that moment is at a moderate level in the industry.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The health insurance company enjoys an oligopoly in the market. The market is concentrated, and the products are pretty similar. The buyer of health insurance products are individuals, business companies, and government institutes. Buyers will generally compete with the industry by bargaining for lower prices, higher quality products, or more services and, most importantly, playing competitors against each other at the expense of the industry profitability. The buyer couldn&#8217;t control if the products are specialized and unavailable in the market (HBR, 1979). The individual doesn&#8217;t hold any bargaining power over the company at all. Companies can exert their power because they provide bigger clientele and opt for their services in bulk. The overall bargain power of buyers is low in the industry.</p>
<h2 align="justify">Bargaining Power of Supplier</h2>
<p align="justify">Suppliers in the health insurance industry are mainly of two types. One is the firms that bring the client, government institutes, hospitals, and corporate companies. The other one is the lending institutes which provide funds in case of payment. Suppliers hold moderate to low bargaining power in the industry. Their bargaining power depends upon few factors such as suppliers’ importance and concentration of suppliers. Suppliers can reduce the industry&#8217;s profitability by raising prices or reducing the quality of the products and services (Hill &; Jones, 2012). The supplier has a limited market for pitching their product. Overall the bargaining power is low against health insurer in the US.</p>
<h2 align="justify">References</h2>
<p align="justify"><span style="font-size: small;">AMA. (2020). COMPETITION in HEALTH INSURANCE A comprehensive study of US markets. Available at: https://www.ama-assn.org/system/files/2020-10/competition-health-insurance-us-markets.pdf<br />
Congressional Research Report. (2020). US Health Care Coverage and Spending. Available at: https://fas.org/sgp/crs/misc/IF10830.pdf<br />
Deloitte. (2021). The fintech revolution in insurance. Available at: https://www2.deloitte.com/us/en/pages/financial-services/articles/fintech-revolution-in-insurance.html<br />
Forbes. (2020). Humana Aims To Streamline Services With AI. Available at: https://www.forbes.com/sites/neiledwards/2020/03/02/why-doesnt-your-healthcare-insurer-use-ai-like-humana-does/?sh=6d538ead608e<br />
Forbes. (2021). Humana. Available at: https://www.forbes.com/companies/humana/?sh=38bbad254390<br />
Harvard Business Review. (1979) How Competitive Forces Shape Strategy. Available at: https://hbr.org/1979/03/how-competitive-forces-shape-strategy<br />
Hill, C. W., &; Jones, G. R. (2012). Essentials of strategic management. Cengage Learning.<br />
Statista. (2021). Market share of leading health insurance companies in the United States in 2019, by direct premiums written. Available at: https://www.statista.com/statistics/216518/leading-us-health-insurance-groups-in-the-us/</span></p>
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