By Bruno Bertocci, Head of the Global Sustainable Equities team and lead Portfolio Manager; Joe Elegante, Senior Portfolio Manager and Alix Foulonneau, Analyst
Major technological advances enable ease-of-use, greater access to services, improved knowledge and understanding of customers' needs as well as system and cost efficiency. These are all factors that can improve personal health and promote healthier populations, and help meet the evolving needs of a changing health care environment.
State-sponsored health schemes are under pressure globally, and it is becoming more evident that private insurances (corporate funded or not) are part of the solution to providing access to health care.
UBS AM – we find investment opportunities
At UBS Asset Management, we find investment opportunities with innovative companies delivering solutions to the world’s most pressing sustainability challenges.
One example includes a health and well-being company that provides health care benefits for individuals, businesses, Medicare and retirement programs in the U.S.
With consumers choosing to take more responsibility for their health care decisions, the need to manage cost is increasingly important. With this in mind, the company is expected to benefit as the company provide innovative and private market solutions.
We believe the company has the ability to grow Medicare Advantage Enrollment at +5% per year over the next five years.
With over $17bn of operating cash flow annually, the company has the ability to invest and innovate through its digital care delivery business providing information and technology-enabled health services. Such investment, along with international growth, is expected to set it apart from its competitors.
We initiated our position in the company in December 2013.
UBS ESG Model score: 9
Best-in-class in Health Care Equipment and Services
Our ESG Model shows that the company scores highly on governance matters, notably on Board policies.
Employee retention factors appear well above average although social operational risks rank below.
Environmental factors and disclosure are also above peer median.
Health and well-being company –sustainability profile
With its IT health service business, the company leverages technology to expand access to health care and improve efficiency.
It uses confidential and sensitive data of more than 130 million people and demonstrates advanced data protection policies.
It offers career development programs and actively recruits graduates and >50 years and older employees. It also focuses on attracting data scientists and developing health data knowledge.
The insurer has a range of programs in place to fight obesity and expand quality care at lower costs.
It is transparent on the diversity of its workforce, disclosing data on the share of women in the workforce, at Board level and also minorities' representation.
We note that one-third of the management's incentive targets are tied to quality targets such as physician satisfaction and employee engagement.
How we have engaged:
- We engaged with the company on ESG matters, including on the opioid crisis, the false claim act lawsuit, data privacy and security, and customer service management.
- We encouraged the company to report more detailed information publicly on the implementation and compliance with the Code of Ethics, annual employee training on the Code, and on any internal audits and / or third party monitoring.
- We encouraged the company to disclose on the provisions of annual employee data privacy and security training.
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