· UnitedHealthcare surges ahead as the world’s most valuable healthcare brand, following 39% growth to US$18.6 billion
· US dominates rankings, fielding 21 of the world’s top 25 healthcare brands
· Health Net is fastest-growing brand, up 45% to US$2.7 billion
· Essilor is strongest healthcare brand, with AA+ brand strength rating
UnitedHealthcare, the American health insurer, strengthened its position as the world’s most valuable healthcare brand, following 39% brand value growth to US$18.6 billion, according to the latest report by Brand Finance, the world’s leading brand valuation and strategy consultancy.
Anthem (brand value down 5% to US$10.1 billion) and Aetna (up 9% to US$9.4 billion) defended second and third place respectively, ahead of the rapidly-growing Humana (up 25% to US$9.0 billion) and Optum (up 41% to US$8.4 billion), which both overtook Medtronic (down 8% to US$7.9 billion).
UnitedHealthcare and Optum are owned by the same corporation, UnitedHealth Group, which is driving significant revenue growth for both their insurance brand (UnitedHealthcare) and the service provider (Optum). UnitedHealthcare is moving to a value-based care reimbursement model which is tied more closely to health outcomes, rather than a traditional model of paying for services rendered.
David Haigh, CEO of Brand Finance, commented:
“UnitedHealth Group is building a very valuable pair of brands operating on the front line of healthcare. Whilst focused on the US markets, the group operates globally with UnitedHealthcare brand supplying solid healthcare coverage, and the Optum brand providing a number of technology-driven health services. These distinct but complementary brands are growing rapidly in a politically-contentious and emotionally-charged sector.”
21 out of the 25 brands in the Brand Finance Healthcare 25 ranking come from the United States, which does not come as a surprise given the level of deregulation of the American market compared to the European model built on universal healthcare.
Health Net is fastest-growing brand
Health Net is the fastest-growing healthcare brand this year, up 45% to US$2.7 billion. Its acquisition by Centene Corporation in 2016 opened up a wider customer base which has likely benefited its brand value. Health Net’s parent company, Centene Corporation, also fared well this year, increasing its brand value 40% to US$3.7 billion and breaking into the top 10.
Dallas-based Tenet Healthcare experienced the biggest drop in brand value, down 10% to US$2.8 billion. The brand’s rising debt levels, coupled with a tarnished public image after unnecessary heart surgeries by two doctors at a Tenet run hospital in California and high legal fees for a billing scandal involving patient referrals, were some of the causes that contributed to its decline.
Essilor is strongest healthcare brand
Aside from measuring the overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, customer perceptions, staff satisfaction, and corporate reputation. Along with the level of revenues, brand strength is a crucial driver of brand value.
According to these criteria, French brand Essilor, the world’s number one manufacturer of lenses and contact lenses, remains the world’s strongest healthcare brand with a Brand Strength Index (BSI) score of 74.8 out of 100 and a corresponding brand rating of AA+. Essilor invested heavily in building its brand awareness, through a series of high-profile advertising campaigns, and also broadened its service distribution channels through tactical acquisitions.
Two significant purchases, MyOptique and Vision Direct, helped Essilor to grow its online retail presence. In particular, the acquisition of MyOptique expanded Essilor’s digital footprint to Central Europe and improved its capabilities across a variety of product categories. Furthermore, Essilor’s new partnership with Photosynthesis Group, a Hong Kong-based brand that markets sunglasses and corrective lenses, will help Essilor grow in the Chinese optical sector.
Essilor is also currently on track to merge with Italy’s Luxottica, the world’s biggest eyeglass frame maker and owner of the Ray-Ban and Oakley brands and retail chain Sunglass Hut. The merger will provide significant synergies and innovation opportunities for both brands.
Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 25 most valuable healthcare brands in the world are included in the Brand Finance Healthcare 25 2018 league table.
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 assessed through a balanced scorecard of factors (such as marketing investment, stakeholder equity, and business performance) and used to determine what proportion of a business’s revenue is contributed by the brand.
Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Healthcare 25 2018 report.
Brand Finance helped craft the internationally recognized standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.
Data compiled for the Brand Finance league tables 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.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined 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 is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
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 Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings 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, while 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 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.