Walmart in talks to acquire health insurer (WMT)

Walmart is in early-stage discussions with health insurance company Humana that could see the companies develop closer ties, with Walmart potentially acquiring Humana, Reutersreports.

The two companies already have a relationship: They have a cobranded Medicare drug plan andworked together on a healthy food rewards program.

Pairing up with Humana could help Walmart bolster its in-store healthcare services.Walmart has one of the biggest pharmacy chains in the US, and CVS, one of its main competitors, is in the process of trying to take over health insurance company Aetna, which would bolster its roster of in-store healthcare services.

By working with Humana, Walmart could do the same by adding more primary-care clinics, which some of its locations already have, as well as other services. Considering that Walmart has a store within 10 miles of approximately 90% of US consumers, according to CEO Doug McMillon, the retailer could be a convenient location for many consumers to go to for all of their healthcare needs, bringing in revenue on its own in addition to drawing more potential shoppers into its stores.

The true value to Walmart in working closely with Humana may be access to a treasure trove of new consumer data, retail expert Bob Phibbs, CEO of The Retail Doctor, told Business Insider Intelligence. Offering more healthcare services in conjunction with Humana could give Walmart more information on its consumers, as well as data on those who would only go to Walmart for medical reasons.

The retailer would have to comply with patient information regulations, as they will determine how Walmart is allowed to collect and use consumer data. But, if it can find valuable and legal ways to utilize the data, it could help Walmart compete with Amazon and its own huge set of consumer data.

Retailers like Walmart are adding more services, like healthcare, to their portfolios to offer nonretail value to consumers, Phibbs said. Due to Amazon’s control of US e-commerce and retail as a whole, other retailers appear to be looking elsewhere to add value and new revenue opportunities. Adding healthcare services with the help of Humana would be a continuation of Walmart’s efforts to become a true one-stop shop, for example.

Its recently added services from FedEx, CarSaver, Handy, and potentially Humana could bring new customers to its stores, but also give it new ways to boost its performance beyond direct retail sales. As more retailers become worried about Amazon and the “retail apocalypse,” such moves may become commonplace, as big retailers are looking to escape being simply retailers and avoid falling victim to a changing retail environment.

Walmart in talks to acquire health insurer (WMT)

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