By Brent Kendall

WASHINGTON -- Anthem Inc. executives told a judge Tuesday that consumers would benefit from the company's proposed acquisition of Cigna Corp., saying the new company would be highly innovative while not reducing the fierce competition in the health insurance marketplace.

The testimony came as Anthem began its courtroom defense of its planned acquisition of rival insurer Cigna, putting on the witness stand its own executives to testify about the deal's benefits.

Morgan Kendrick, an Anthem executive in charge of national customer accounts, said innovation "is oxygen to our business" and Cigna "is exceptionally innovative...That's something that's very attractive to our company."

Mr. Kendrick also said that, contrary to the government's assertions, the health insurance market would remain competitive if Anthem's deal for Cigna is approved by U.S. District Judge Amy Berman Jackson, who is presiding over an antitrust challenge to the transaction brought by the Justice Department.

While Cigna has admirable strengths, Mr. Kendrick said, it is not a top competitor of Anthem's. Anthem, he said, competes most fiercely head-to-head with UnitedHealth Group Inc. and Aetna Inc.

The Justice Department sued to block the deal in July, while simultaneously challenging another major insurance deal that would combine Aetna and Humana Inc. A trial on that merger begins next week in the same Washington, D.C., courthouse.

The Anthem case has seen five days of court proceedings, and the first phase of the case is expected to conclude this week. A second phase of the case could begin later next month, on a second set of arguments the government is making against the deal.

The department argues the mergers would unlawfully suppress competition that has led to lower prices and better care. The companies dispute this, saying the deals would produce consumer benefits, including cost savings stemming from greater efficiency.

The Anthem-Cigna case has turned into one of the more unusual merger deals in recent years, as sharp tensions have arisen between the two companies even as their push to link up moves forward. Cigna officials privately accuse Anthem of misrepresenting their company's role in a postmerger company, while Anthem complains that Cigna has stopped cooperating on planning for the merger.

Anthem on Tuesday used multiple company witnesses to underline its arguments against the Justice Department's case.

Two Anthem executives testified that the company is facing tough competition as employers slice off parts of their health benefits programs and give it to competing insurers. They also said Anthem is facing competition from private exchanges: online health-insurance marketplaces that let employers offer their workers a range of plans.

Anthem's lawyers drew criticism from Judge Jackson, however, for making some of the same points several times, including their attempts to rebut Justice Department arguments that the merger would reduce competition in the market for large national customers.

Anthem lawyers throughout the trial have said there is no industrywide definition of who counts as a national customer, meaning there is no distinct and separate market for that business.

When the company sought to elicit similar testimony Tuesday, the judge interrupted, saying she'd already heard such statements repeatedly and understood the company's position."I begged you to not do this again," Judge Jackson told an Anthem lawyer. She said the company was slowing down the proceedings by returning to topics that already had been well covered.

Write to Brent Kendall at

(END) Dow Jones Newswires

November 29, 2016 18:47 ET (23:47 GMT)

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