Mr Ramon M. Ruiz, President & CEO Triple S Management Co.
Mrs Socorro Rivas, President & CEO Triple S
Mrs Vivian López, Vice-President Public Relations

RAMÓN M. RUÍZ President & CEO of Triple-S Management Corporation

First of all thank you for receiving us
Mr Ramon M. Ruiz:
Triple S, Inc. was created in Puerto Rico in 1959 as a health insurance company. Doctors and dentists from that time thought that it was very important to create a health insurance company able to provide health services to the population of Puerto Rico; giving the insured community free choice of providers. On 1999, Triple S management decided to be more than a health insurance company. For example, we have our own property and casualty insurance company and life insurance company. Also, last year (2002) Triple S management began to consider doing business within the financial industry, not as a bank but as a company that can provide financial products to our insured people. Based on that vision, Triple S Management Corporation was created as a holding company with 5 subsidiaries:
· Triple S Inc. - Health Insurance Company
· Seguros Triple S Inc.- Property and Casualty insurance company
· Seguros de Vida Triple S Inc. - Life Insurance Company
· Triple C Inc.- is a third party administrator that we have to operate the reform business that is issue through Triple S Inc. In this case, Triple S Inc. is the insurer but is operated through the
· subsidiary.
· Interactive Systems Inc.- is our data processing company. They provide their service to all of our subsidiaries.
By doing this (working through subsidiaries), people could be focus on the business they are working on. The people from Triple C work at this point exclusively on the reform business and still working on some products that still under the developing process. For example; many people don't know that this year we started providing phone-consultation services in Spanish for the Hispanic community in the state of Oregon. This service is called Tele-Consulta.

SOCORRO RIVAS President & CEO of Triple-S

Mrs Socorro Rivas:
We are also covering in that same call center the overflow phone calls of English speakers. We have fully bilingual registered nurses that help us to answer those phone calls.

Mr Ramon M. Ruiz:
To give you an example, when we talk about California, we can cover certain hours that are normal hours in Puerto Rico, but are early morning hours in United States. Therefore, the service is provided at a lower cost than the cost they will have in the States to provide the service. Besides, we feel very proud of the fact that many Puertorricans can speak English and Spanish. That means that we can provide an important service to a community that many companies in the State cannot reach.

On the other hand, we are looking forward to create a company, which can provide services to the elderly community in Puerto Rico. There is a huge need of long-term care centers, where we can provide medical services, housing, food, and all type of services to this elderly population.
We are working with other initiatives to expand our participation within the health services industry. Besides, we are looking forward to increase our participation within the life and property and casualty insurance industries. We have one of the most excellent team of executives that a company can have within their organization. We have experience, loyal employees and the desire to serve all the population. We want to serve. Service is our trademark. We are looking forward to provide the best service to our people.

Is there any possibility that the Tele-Consulta service could be available in other states?
Mr Ramon M. Ruiz:
We are looking forward to it. However, you have to very careful with the marketing of any service in the United States. Whenever we decide to go into the states is because we understand that we can serve that population with the same type of objective that we have when we serve the people here in Puerto Rico. Is not to only have a presence, it's to be the difference.

When I pointed the question, I was thinking about New York and the Hispanic community there, not only Puertorricans, but also Dominicans, Cubans, among others. They could feel much more comfortable with a company they already know that could really understand them.
Mr Ramon M. Ruiz:
As we were talking before, we are Hispanics. We understand where we come from and what really drive us. That is why I think we can be a difference and provide a quality service that people need to be provided with.

Mrs Socorro Rivas:
There are other opportunities (in United States) not necessarily in the health side for example with Tele-Consulta. For example, we do have capabilities of doing specific technical translations for other partners in the states that serve Hispanic communities.

Mr Ramon M. Ruiz:
Another example; you can ask many health insurance companies of the percentage of health claims that were processed via modem. You will find out that this percentage is close to 50%. In our case, 90% of our claims are processed via modem. Many people do not know that we have been able to create a claim system to serve our 1.2 million customers.

Mrs Socorro Rivas:
Our claim administrative cost if is not the lowest, it's very close to be the lowest in the market because we have take advantage of the technology. We processed thousands and thousands of health claims without human intervention at all. We send the payments to the provider's bank, we send electronic explanation of payments, so we try to constantly to evaluate our processes to make sure we are efficient in order to maintain cost at a reasonable level.

It is very clear that the difference between Triple S and other healthcare companies is the way you (Triple S) know your business. Normally, health insurance companies don't understand health as a global, they don't want to provide a client all the services he or she could need. Is that the reason of being market leader?
Mrs Socorro Rivas:
Maybe we were not the leaders initially, but the way we have worked in the past 44 years has helped us come to be the leader in terms of the positioning in the market. For example, in year 2000 when everybody had to work with the Y2K case, we took the initiative to give lectures and conferences all over the Island to business partners, doctors, and we became the leaders on how to handle the Y2K issue.
That is exactly what are we doing know with HIPA case. For the past 2 years we have been giving conferences around the Island to employers, to hospitals and other business partners. We do not charge for those lectures. We prepared a CD-ROM where we've established the basic guidelines to be HIPA compliant on the privacy side to all our providers, physicians and dentists. Its like a recipe cookbook, they just have to fill blanks and they can make it operational for their facility. Right now there are some institutions charging $500.00 for the same conference that we've been doing for free as a contribution to the community.

That type of things is what has made us successful. I think we first determine what we need to do and then we look what we can get from it. Sometimes people need to see up-front what is in there for them. We have been doing in a different way: We understand that is our responsibility to do this. What we get about that? The recognition terms that again Triple S is taking the leadership of advising everybody about the HIPA case and facilitating the process. I think that taking that responsibility from the beginning is what makes us successful in this market. We have been very focused on service to our 1.2 million customers in Puerto Rico. We have accounts, for example, the Federal Government employees. We serve them since we started operations in 1960. They have other healthcare options and we still have 98% of their employees. That is an example of how we do things to serve our people keeping their loyalty.

Now that we have the idea of what is Triple S, could we speak about the market itself. How its been developed? In the last 10 years there has been a boom in the insurance sector in this country. Right now 2003, where are you standing?
Mrs Socorro Rivas:
There was a boom in the health industry when the government introduced the Reform for the medical indigent in 1994. This reform was completed on year 2000. On that year it was covering San Juan, that was the last region to enter into the healthcare reform. At this point Triple S is static in terms of growth. What we expect is that it wouldn't be any growth unless we start seeing more companies moving to the Island. The last two years has been slow in terms of new companies coming to Puerto Rico. However, we have seen a different shift in the past month mainly from existing pharmaceuticals and technological companies that has been expanding their services. By that, they create employment and we lived from employment. Most of our business comes from groups of employers. The population is very stable in the Island (about 3.8 million). I think some type of health insurance already covers most of it. However, there is a segment that cannot afford the private one or do not qualify for the medical indigent, so there is still an opportunity there. We have some products but we are looking for ways to make affordable to those people. In fact, we will start serving the first group that has very low rate per hour or providing limited benefits (basic coverage). For example they will have access to hospital coverage and medical surgical, but they don't want access to the States. Actually we offer to all of our private members have access to the local facilities or also access to the states if the service if is not provided locally or if its going to be better served in a facility at the States. Our objective is to have the broadest coverage but we understand that everybody cannot afford it. We are making some adjustments to make it affordable.
That is the population that we may have accessing that actually we don't have. Also, we are expecting a boom within the construction sector. We are leaders in that segment likewise in the service industry. Since those sectors will be growing, we will take advantage of that growth and get to serve more members.

Mr Ramon M. Ruiz:
More than 90% of our population has healthcare insurance - private or with the government program. In terms of population I would say we could link to that 10% might be uninsured. There is an opportunity to serve that 10% of insured people if we have some affordable and accessible for them.

How is the market responding to the numbers of companies doing business in the healthcare sector? Are there too many entities?
Mr Ramon M. Ruiz:
Let me put it this way. Technically speaking the only native healthcare company in Puerto Rico is Triple S. It is owned 100% by Puertorrican capital. Humana is from the states, MCS is a combination - they have a joint venture with WellPoint. On the other hand, we have La Cruz Azul, which is a subsidiary of Independence. Yes, we have companies from the states doing business in Puerto Rico, but I don't see other insurance companies coming here to the Island in a near future. Why? As we were talking, 10% or less of our population are uninsured, therefore the opportunity to grow for new companies is very limited.

In that sense, the logical question is then expansion. If you don't get what you need in the local market you will have to look out for other opportunities…
Mr Ramon M. Ruiz:
That is something we are looking for. Many companies from PR go to the states to have
presence. I don't want to be in the states for just the fun of having presence. We want to be in the states to be the difference.

Mrs Socorro Rivas:
That is something we have to explore more in depth. It doesn't' have to be on the health side. It could be with a combination of services that we can provide. For example, we can be claim processors for small companies. Here we have small companies that are HMO's, sometimes they don't want to use our clearing house and processing services because we are competing. However, we can establish partnership with companies in the states to do the same thing (claim processing). Part of the reason we had our reorganization in 1999 was to be able to develop other areas because as a health insurance company, we were so limited to offer other type of services.

Is the marketing still under Triple S?
Mr Ramon M. Ruiz:
We advertise Triple S management as the group of companies that can be the whole solution to our clients. Also, we advertise our individual companies that provide a specific service. For example in Plazas Las Americas (Mall) we opened a branch that is providing the service for three of our companies. We are developing the concept of one stop shop and the whole solution to the customer. If I have a customer and tell him/her: I can cover your house, your car, your health and your life…here is my proposal….He/She will like it because they will receive the whole package in one place. That is something we are working on right now.

What about Medicare? How do you work with it?
Mrs Socorro Rivas:
We served Part B as an intermediary of Part B of Medicare. We have over 400,000 beneficiaries that are not included in the 1.2M that we mentioned before. We provide access to the ambulatory services. We have been the carriers for Medicare since 1966. COSVI, which is a large life insurance company that works as a cooperative - they have Part A.

Mr Ramon M. Ruiz:
In that case we are not a social security company. We act as intermediary between the federal government and the customer. We provide the service on behalf the federal government.

Are you the only company that is able to provide that service?
Mrs Socorro Rivas:
Two years ago a new company called Medicare Plus Choice was established in Puerto Rico. Medicare promotes this new company in the states. The company is responsible for the risk as an insurance company. We don't have risk. We just manage a portion of the business. I don't know in term of numbers what is the population they are actually serving because since we are carriers, we cannot get too much involve because it might be seen that we are trying to getting out of business or something like that. The less we know the better.

You were talking about some product you were developing, for Triple C…tell us more about it…
Mr Ramon M. Ruiz:
For Triple C is what is related to Tele-Consulta. We have a contract agreement with McKeson, which is a big health company in the states - where they help to provide the service of Tele-Consulta. We have been working with them on a proposal to start providing this Tele-Consulta service to the Hispanic population in United States. I know that we already started to provide that service and we expect that we will be become the center of this calls that come from people of the states who only speak Spanish. They will be sending those calls to Puerto Rico so we can answer them.

Are there any other products under development?
Mrs Socorro Rivas:
We are evaluating possibilities of marketing some programs like case management. We understand that there are companies that make separate charges or premiums for those services like case management or disease management. We are evaluating if we can have those as stand alone products and sell it not to our members because they already have, but to other members of the population.

Mr Ramon M. Ruiz:
We are also working with group of products from different companies put it them together as a package and sell it them to our customers. The idea is that we could be able to provide the whole solution to the customers. For them it will be easy to do business with only one company. For example, people like doctors and dentist that work as self-employed. We can offer them life & disability insurance and/or malpractice protection all together as a package. Again, we can provide the whole solution for people insurance needs.

Mrs Socorro Rivas:
In the past, we were growing and we didn't take advantage of many situations that we can now take advantage of. Now we are better structured to handle those opportunities.

Being market leaders always brings a great responsibility. But being a market leader in health, thinking about all the people that have a subscription with you. You are talking about their security, their health, and their accessibility to medical services. How do you deal with that sense of responsibility?
Mrs Socorro Rivas:
Is tough in the sense that we want to provide immediate access to all services that are available, for example medical drugs that pharmaceutical companies put into the market everyday. At the same time we want to maintain a reasonable cost because the Puertorricans acquisition power is not necessary the same as in the states. How we handle that? For example, we evaluate every medication that comes from a pharmaceutical company. If there is a similar drug that we already cover and does the same benefit - (equivalent products) - Our clients have the option to select from the equivalent or the one that comes from the pharmaceutical company. The difference will be the customer's co-pay amount that will have to pay. For example, right now we are under the evaluation process of a new mammography service that will provide more accurate diagnosis to identify potential breast cancer faster than the traditional mammography. After our evaluation, we will put it immediately available to our members. At that time we are not increasing premiums, we just making accessible the service. We do this constantly. We evaluate what is new in the medical services and making accesible to our members. If it is a breakthrough drug for example, we try it to cover it immediately. We don't wait until the member renews their policy that most of the time is yearly.

In addition, you have a lot of pressure because you have to manage a business very well in order to afford and provide those services without charging premiums for it until their renewals. Is a constant challenge to make sure you have all the access possible, but at the same time you contain the cost and make sure it doesn't grow at a higher pace than probably their income levels.

Mr Ramon M. Ruiz:
There is pressure, but always you have to see the positive side. How many people we will be helping? You have to be focus on that. I always think that if one of my children gets sick and need a transplant, what would I do? My answer would be whatever I have to do. When you think this way, you try to provide the ability to people to have the more coverage possible.

Mrs Socorro Rivas:
Organs transplant is an example of our responsibility with the community. In the past we only covered groups larger than 50 people. On September last year (2002) we started offering transplant coverage to all groups no matter the amount of members in that group. We are the only one offering the major medical plus a special coverage of organ transplants that provides assistance for 5 different types of transplants. We are always looking for ways to improve the coverage that we provide to our customers.

It is a constant process of evaluation of the services you provide with the cost associate to it. How you can be more efficient everyday. We make sure that everything we have contributes or add value to our customer. We measure our operation constantly. We have operational indicators. We measure almost everything. We evaluate people based on those indicators. We have indicators for speed of answering phone calls, the time people wait on our visitors area, the time we spent answering letters or mail, the time we serve internally. For example, if marketing requires a quotation of the underwriting or actuarial department. That request should be answered is specific amount of hours or days. Even for the internal services among divisions we have indicators. We have to know very well the business and look for opportunities. Everyday we identify opportunities.

Mr Ramon M. Ruiz:
We criticize ourselves in a positive way. The reason for this we try to look things as a customer. Don't try to see what you want to see. See things according the way customer see them. Then you take action to improve what is not working the way it is supposed to be.

Mrs Socorro Rivas:
This evaluation process is not easy because health is something, no matter where you live, that everybody wants to have access. Sometimes you want that access but not necessarily you want to pay for it. In other cases you cannot pay for it. It is a constant evaluation and making determinations of how to make it more affordable.

We have heard through the whole interview that you are planning to grow. How much do you plan to grow? What are the objectives that you have set for the next two or three years?
Mr Ramon M. Ruiz:
For example, we have talked that in the next 8 years we want to be a 2 billion company.

The other question is regarding your expansion. You have evaluated some expansion outside Puerto Rico. Where?
Mr Ramon M. Ruiz:
As a matter of fact, we are evaluating opportunities in some countries like South and Central America. Costa Rica, Dominican Republic…I think that there will be opportunity because of this - The experience that we had obtained in the reform business it's something you can used in many of the countries in Latin America. In many of those countries, the government is who provides the health insurance. We see that in the future we might go into one of those areas.

I have two more questions for you:
1.What do you think is the major challenges you are facing in your industry at this moment? What are the solutions you are trying to provide?
2.What are you expecting of this interview? Do you think that you have achieved it?
Mr Ramon M. Ruiz:
Let me answer the second one. You are giving us the opportunity for people to know that Puerto Rico is an Island with almost 4M people that are capable of doing good things. That there are companies like ours capable to provide an important service to our population and that have all the energy to continue to grow and also become an icon in the industry that we serve. I've working for Triple S for the past thirteen years and I feel very proud of it because it is not only an organization where profits is the ultimate goal. The management at Triple S understands business, the importance and the huge responsibility that comes with it. We can be the difference between life and death. We are aware that we are not perfect. That gives us a lot of opportunities to improve the service we offer to our population.

Mrs Socorro Rivas:
I would like to add that I might expect that you somehow relate our history to other possible success stories in the Island. This Island has a lot of talent that can be available to the service of other companies. For example, we have one of the most important engineering universities. Usually, a lot of companies from the states come to Puerto Rico to do the recruitment for engineers. We have a lot of student from the Caribbean studying in that university. We have very educated people. We have very well trained people that is a resource for many companies that comes to Puerto Rico to do business. We are a very stable country because our democracy and our relationship with United States. The same success that we have, other companies also may have. We have the infrastructure, the resources and enough assets to offer to others to develop here in the Island. I understand that our company's success others can see as a something they can look forward. In the health side we have more healthcare facilities in this Island that probably in a lot of the states. We have almost 50 hospitals all over the Island. Some of them very specialized. Some of them do transplants of kidney, heart, and pancreas. We have a lot of sophisticated facilities where they can work. They have the education in Puerto Rico and then the board certification in the states, or they come directly from the states to work in Puerto Rico.

Mrs Vivian López:
Answering you the first question, we are helping several institutions with information and
orientation as a way to oppose the challenges in the health insurance industry. We have a big database of the services we provide and the population we serve. We have them accessible, for example to the University of Puerto Rico, to Puerto Rico Health Department so it can be used in research or statistics that they can project into the entire population. We keep the confidentiality and privacy of the information. We understand that this service is not accessible otherwise for the government of universities.

Besides, we are constantly participating in leadership positions among community's organizations. We have a motto: we share what we have. If doesn't matter if it is in the economic forum or health forum. We want to allow our people to share what we have.

Mr Ramon M. Ruiz:
In the economic side, we are challenged with an economy that is facing problems - it is kind of slow. In order to provide the type of service we want to provide we have to look for different alternatives to continue to enhance the service levels that our people are hoping to receive. That's why if you always operate from the service point of view, you understand that you have to create more things to be able to serve. The economy will be part of the solution of the problem that we have. The way we have worked about the economic situation is to focus on the solutions and not into the problems. When you identify a problem, you should work it out immediately. You can't worry. I always say that tomorrow I can't do anything that I was supposed to do today.