Archive | October 20, 2015

The future for Humana and the insurance industry as a whole (Team 13 DTP)


Humana Inc. is a Kentucky-based for-profit health insurance company. With over 13 million customers in the U.S., a reported turnover of US$48.5 billion, and over 57,000 employees, it is the third largest health insurance company in the nation. Humana’s value proposition is to bring health insurance to all consumers of the US at a rate that is at least 15% lower than that offered by the government. However, even with its current success, Humana and the insurance industry as a whole has been lacking in innovation. We propose a solution using smart wristbands in order to create a new service offering for Humana.

Proposed solution

The solution we proposed in our assignment was the introduction of smart wristbands that would monitor the activity, sleep, and potentially the heart rate of the clients in order to offer more accurate prices. Basically, they would be able to engage in first-degree price discrimination with the use of this technology. This addition to Humana’s services would also complement the feature where customers receive bonuses if they live a healthy lifestyle by actually tracking any sporting activity that the customer engages in.

The two wristbands we suggested where the Jawbone UP24 and the Garmin Vivosmart.


The reason why we suggest using two models as opposed to just setting a standard of one model is that the heart rate monitor is more expensive to add and should be added only if customers have chronic heart conditions or are over the age threshold determined by Humana. This offers the possibility of another service offering: being aware of any episodes that customers with such conditions might have and the potential of alerting the right authorities (for example, an ambulance) to arrive faster than in a usual situation.

To better illustrate the technology itself, we have created a SWOT analysis. This analysis is summarized in the following table:



When suggesting an ambitious project such as this one, it is very important to consider the feasibility before undertaking any implementation. First of all, we considered the financial feasibility of the project. This includes any significant costs that the project is likely to lead to and is then compared with the revenue of the company in order to see if it would be financially feasible. The costs are summarized in the following table:


The main costs included were the cost of purchasing the wristbands (where we assumed that they could be bought while benefiting from a bulk discount due to the amount purchased), the cost of setting up a new set of servers in order to accommodate the new amount of data that will be gathered using the wrist bands, as well as the new hires needed. Specifically, the new hires will include a Data Scientist and two Data Analysts in order to take advantage of all the data being gathered and potentially provide new insights. Considering that Humana’s revenue was $41 billion in 2014 it is safe to assume that undertaking this project is financially feasible.

The project is also considered technically feasible, due to these products already being released commercially and tested for these purposes. In addition, legal feasibility is no issue since the Data Privacy Act in the US is not very restrictive and does not hinder the project in any way. Finally, the project is also operationally feasible since it already fits in with the systems that Humana has and can just be offered as a supplement, rather than a completely new offering.


We believe that this project will bring a number of benefits for Humana and at quite a low cost. We suggest that Humana makes sure that the project’s outcomes will follow the plan by first implementing it in a number of areas in order to test out the consumer response.

Humana’s website:

This has been a summary of the Digital Transformation Project written by Team 13, composed of the following members:

Maximilian Wiedmaier – 366864mw
Claudio Corti – 372722cc
Alex Furnica – 375587af
Paul Leonard – 354502pg
Maxim Grgurevic – 372850mg