Here is an interviw with aetna ceo huber who predicts double digit growth into the next century
CASSIE SEIFERT: Aetna (NYSE:AET) has a new president and chief executive officer
this week He's Dick Huber, who was promoted from vice chairman after playing
key roles in both Aetna's purchase of U.S. Healthcare last year and the sale
of Aetna's property and casualty business to the Travelers Group. Joining me
now from Aetna's headquarters in Hartford, Connecticut, is Dick Huber. Mr.
Huber, welcome and congratulations.
RICHARD HUBER, PRESIDENT AND CHIEF EXECUTIVE OFFICER, AETNA: Thank you very
much.
SEIFERT: In the last year, Aetna has transformed itself already from an old
style insurance company into a giant in the managed health care field. How
do you hope now to make your mark on the company as CEO?
HUBER: Well, we've done something that's a little unusual. We've taken a 140
plus year old company and, as you say, transformed it into a really, a growth
company. And so we have tremendous amount of momentum. My challenge is just
to keep that momentum going. And I guess once in a while light up the after
burners.
SEIFERT: The HMO business now makes up I understand more than half of your
annual revenues. Some analysts express concerns when your appointment was
made that you don't have a lot of background in health care. How do you hope
to overcome those concerns?
HUBER: Well, I always remember when Jack Welsh was, the CEO of GE (NYSE:GE), was
asked how he could oversee the business of NBC, which is the television
business. He says you know he really had a fair amount of difficulty making
jet engines as well. So I will not be writing any prescriptions, I promise
you that. But I consider myself a, pretty good general manager. I was
deeply involved in the strategic planning that led to our acquisition of U.S.
Healthcare. I was a senior member of the integration planning team. And
have been involved in the actual implementation of the integration. But ...
SEIFERT: You do have a very strong background in financial services. What
sort of role do you expect financial services versus health care to play at
Aetna going forward?
HUBER: Well we're blessed to be in two businesses with very strong
demographics. As you're well aware, the demand for health care services in
this country has been growing at over 10 percent to the last decade. It
looks like it's going to continue at double digits well into the 21st
Century. And in the retirement services field, the aging baby boomers, the
propensity to save, the doubt about the, whether social security will be
there when we need it. All those are driving great demand for the type of
products that we sell. So I think we're sitting pretty.
SEIFERT: In the last year with some of the changes you've made and the kind
of demand that you're talking about, your stock has appreciated more than 80
percent. Do you expect to be able to keep up that kind of performance?
HUBER: That's a challenge. But, I still think we're well, well below our
potential. We are generating an additional $2 per share in goodwill
amortization. We have, as you're well aware in this country, we have
something called sort of a 19th Century accounting system that says that the
acquisition of intangibles is basically worthless, so we have to write it
off. But the last time I looked, that's real money. So the stock really is
not trading at anywhere near the multiple of some of our comparables.
SEIFERT: Okay, I'm afraid that we have to leave it there. Thank you very
much for joining us.
HUBER: Okay, my pleasure. |
