2007 Annual Report

Andrew C. Corbin, President/CEO

You cannot pick up the newspaper, turn on the television or browse the Internet these days without hearing about health and wellness.

My first message to you as the new president/CEO of Blue Cross and Blue Shield of Kansas is no different. I would like to briefly share with you details on the company’s health and, secondly, what you can do today to improve the wellness of our country’s health care delivery system.

Annual exam shows insurer is healthy

Kansans as a whole are fortunate that Blue Cross has a 65-year history of strong leadership. The six people who have held this position before me set a high standard that I am committed to carrying forward with the assistance of our 1,450 employees. Allow me to provide you a health assessment, so to speak, of Blue Cross as of the end of 2007:

• Enrollment. We posted a 26-year high in contracts and served more than 700,000 Kansans who carry a Blue Cross and Blue Shield of Kansas identification card. We hosted an additional 185,000 Kansans who live in our service area but are members of another Blue plan.
• Cost of operations. We operated our business efficiently, spending only 8.1 cents of each premium dollar on administrative costs. For every $1 in administrative costs, we returned $12.84 in savings through various programs. Our contracts with health care providers alone saved members nearly $1.48 billion.
• Customer service. Our representatives handled more than 1 million customer inquiries, and we were one of just 15 companies – and the only Blue plan – to receive a World Class in Customer Service Award from Service Quality Measurement Group.
• Claims payment. We processed in excess of 19.78 million claims totaling more than $1.8 billion. Claims were processed, on average, in four days.
• Policyholders’ reserves. The investment income generated by our strong reserves allowed us to cover a $54 million underwriting loss and still contribute a modest amount to further strengthen these reserves. A.M. Best, considered the most authoritative rating source in the insurance industry, reaffirmed the company’s “A” or “excellent” rating.

Next Page