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United Healthcare dominates rivals yet again

  • United Healthcare defends title of world’s most valuable and fastest growing healthcare brand, rising impressive 64% to US$30.6 billion
  • US dominance reigns supreme: healthcare industry dominated by US brands, only one brand in the top 25 comes from Europe
  • Cigna flexes muscle as world’s strongest healthcare brand, with a Brand Strength Index (BSI) score of 74.60 out of 100

View the full Brand Finance Healthcare 25 2019 report here

United Healthcare, the largest health insurer in the United States, remains the world’s most valuable and fastest growing brand in its sector, rising by an impressive 64% to US$30.6 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy.

Minnetonka-based UnitedHealthcare is up 64% to US$30.6 billion and is also the most valuable healthcare brand in the nation, with a considerably higher brand value than second-place Anthem (up 34% to US$13.6 billion).

The brand’s continued growth trajectory – in 2017 United Healthcare grew by 39% - underlines the significant advantages it has over its main competitors. The gulf between first-placed United Healthcare and its closest rival, Anthem, is some US$ 17 billion in brand value.

Creative brand initiatives boost value
United Healthcare’s brand has been undoubtedly enhanced by some high-profile activities, such as awarding Apple watches to successful participants in its wellness programme and also linking-up with the Super Bowl to offer health advice. The brand has also broadened its offering by starting commercial group health insurance plans across the US under numerous product names.

UnitedHealthcare has significantly increased its customer base and benefitted from winning government contracts including Optum’s win in assisting federal agencies with integrated technology solutions as part of the Alliant 2 contract.

United Healthcare is part of UnitedHealth Group, which also includes Optum, the technology-driven service provider that was established in 2011 to unify the group’s health services business. Optum’s momentum is also very notable, growing by 51% in 2018 to US$ 12.7 billion. Optum, as a brand in its own right, is ranked third by value, up from fifth in 2018.

Alex Haigh, CEO of Brand Finance, commented:

“United Healthcare’s overwhelming dominance of the healthcare market creates an environment where rivals have to acquire and expand in order to achieve the scale they need to compete. Moreover, the landscape is set to change further as technology companies begin to show greater interest in the market.”

Health insurance company Anthem, which grew by 34%, took its brand value to US$16.6 billion. Anthem’s brand is poised to be further strengthened when it starts its own pharmacy benefits manager, IngenioRx. This will replace Anthem’s relationship with Express Scripts, the terms of which have been disputed for several years.

Industry consolidation
The combination of UnitedHealthgroup’s two brands has been the catalyst for further activity within the industry, leading to brands such as Cigna, Humana and Aetna attempting to form closer ties with medical care providers. Consolidation within the industry is enabling brands to achieve greater scale and improve its competitiveness, particularly important given that non-traditional players, such as Amazon, are perched to enter the market. With that in mind, Cigna agreed to acquire Express Scripts for US$ 67 billion in March 2018, while Aetna was sold to drug store operator CVS Health in 2017.

As well as United Healthcare and Optum, other leading brands also demonstrated high growth rates over the course of the year. Medical technology company, Becton Dickinson (BD), saw its brand value climb by 52% and its ranking improve by four places to 14th. The brand has enjoyed positive publicity for its diversity efforts and has been recognised for being one of the best employers for women in the US.

US dominance reigns supreme
The Healthcare industry continues to be dominated by major US brands, with only one company in the top 25 from Europe. Germany’s Fresenius is ranked eighth, with a brand value of just under US$ 7 billion.

While brand values grew significantly at the top end of the scale, Tenet Healthcare suffered the biggest drop, losing 24% of its value. DaVita Medical Group, which was acquired by UnitedHealth Group in late-2017, also saw its brand value fall by 14%.

Cigna flexes muscle
Aside from calculating overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Along with the level of revenues, brand strength is a crucial driver of brand value.

The strongest brand in the sector belongs to Cigna with a score of 74.60 out of 100 followed by Illumina (73.48) and Aetna (73.11). Cigna is the only brand with a rating of AA+.

Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 25 most valuable healthcare brands are included in the Brand Finance Healthcare 25 2019.

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand Strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.

Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Healthcare 25 2019 report.

Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.

Brand Finance is a chartered accountancy firm regulated by ICAEW and also the first brand valuation consultancy to join the International Valuation Standards Council (IVSC).

Data compiled for the Brand Finance rankings and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.

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About Brand Finance          
Brand Finance is the world’s leading brand valuation and strategy consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax, and intellectual property, Brand Finance helps brand owners and investors make the right decisions to maximise brand and business value.

Definition of Brand
Brand Finance helped to craft the internationally recognised standard on Brand Valuation – ISO 10668. It defines a brand as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.

Brand Strength
Brand Strength is the efficacy of a brand’s performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance.

Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a credit rating.

Brand Valuation Approach
Brand Finance calculates the values of the brands in its league tables using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.

The steps in this process are as follows:

1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.

2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.

3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.

4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.

5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.

6 Apply the royalty rate to the forecast revenues to derive brand revenues.

7 Brand revenues are discounted post-tax to a net present value which equals the brand value.

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