Aetna CEO says taking market share

NEW YORK (Reuters) - Aetna Inc (AET.N) is confident in its prospects and is taking market share despite uncertainty over health-care reform and the broader economic climate that has weighed on its shares, the head of the No. 3 U.S. health insurer said on Wednesday.

Layoffs and cutbacks sweeping across the U.S. corporate world are creating a challenge for health insurers to increase their enrollment levels, but Aetna has made gains as it also expands existing relationships, Aetna Chief Executive Officer Ron Williams said.

"We believe we are definitely taking market share," Williams told the Reuters Health Summit in New York. "We are growing by and large across all of our customer market segments."

The company, which reported 17.7 million enrollees at the end of the third quarter, is still finalizing its 2009 projections, but Williams said the company's expectation of boosting its enrollment by 800,000 members in the first quarter puts it in a strong position.

"Any time you can start the year with 800,000 members in the bag in the first quarter, it certainly places us we believe off to a solid start," Williams said.

As an example of Aetna's enrollment growth, Williams cited the insurer's expansion of its members with Bank of America Corp (BAC.N) from 100,000 to 350,000, which was a reflection of Aetna's strategy to integrate its products and data.

"We believe there are a significant number of clients that it will be right for, and we believe it is a competitive advantage to us," Williams said of its integration strategy.

As employers lay off workers, those people may turn to individual policies to keep themselves insured. Williams said Aetna also expects growth in the individual market, for which the company has more than 300,000 enrollees.

Aetna shares have fallen some 61 percent, compared with a 67 percent drop for the Standard & Poor's Managed Healthcare index .GSPHMO of large health insurers.

Fears of a downturn have swept through the sector as virtually every major health insurer has reduced its initial profit expectations for 2008, while the market swoon has worried investors about insurers' balance sheets.

Aetna's valuation is tied to the overall market and to the prospects for healthcare reform, the latter of which has been an overhang, Williams said.

"We can't on our own change the perspective that the market has; the market has to reach that conclusion," Williams said, adding that the best thing Aetna can do is continually focus on customers, meet its commitments and make its case to shareholders.

Aetna has only slightly lowered its forecast for the year, in contrast to sharper revisions by rivals, but the shares have been punished all the same.

"Every morning I have high expectations, and then I confront the reality of what happens at 4 o'clock," he said. In afternoon New York Stock Exchange trade, Aetna shares were down $1.30 or 5.6 percent at $21.99 in a sharply lower market.

(Reporting by Lewis Krauskopf and Debra Sherman, editing by Matthew Lewis and Gerald E. McCormick)