New research documenting consumer pessimism over the future of the NHS highlights major opportunities for insurers, writes Chris Jones.
Who exactly will buy these policies? Research suggests that demand will be broad-based, spanning older and younger people, men and women, and the different social classes. Still, insurers may want to design some policy features with specific audiences in mind.
Older consumers, for example, are more likely to say they would consider buying top-up insurance. So too are consumers who have children or other financial dependants.
Again, this reflects the nervousness many people have about the inability to maintain their current lifestyles in the event of suffering ill-health, and the desire they have to resolve such problems speedily.
One major issue will be how these new products and services are distributed. Traditionally, it has been the banks that have been the major suppliers of protection and affordable health products.
But amid continuing fall-out from the PPI scandal, a great deal of work needs to be done to restore trust in the sector.
direct-to-consumer opportunities
This certainly creates opportunities for insurers to make greater inroads into the direct-to-consumer market and many will choose to put more resources into this distribution channel.
However, there is also an opportunity to work with the banking sector and, in doing so, can help to rebuild its relationship with customers.
Products that offer policyholders preventative features such as diet and lifestyle advice will come to the fore. It may be possible to offer consumers access to private GP services via telephone helplines as state provision is stretched further, for example.
Britain may even follow the example of countries such as the US and Korea, where specialist policies are available to people suffering from conditions and diseases such as cancer and high blood pressure, enabling them to better manage their health on an ongoing basis.
These services could be valuable in helping the banks regain the trust of their customers, but they will also be widely available through the health products that insurers sell through other distribution channels.
One major opportunity is the affinity market where it is possible to see organisations ranging from motoring groups to charities becoming distributors of health insurance policies.
These products will need to be simply designed so that they sit comfortably in the natural conversation between affinity groups and their members. They work best at organisations where the brand lends itself to protection (motoring groups are a good example). But get the products right and they will enable a wide range of affinity groups to deepen their relationships with customers.
The supermarkets, already major players in insurance, will also have a growing role to play, particularly where the sector can design policies that are simple to use – and that offered guaranteed acceptance or, at worst, very minimal underwriting.
Whatever the distribution channel, however, the important point to grasp is that these policies represent a new type of health insurance product, reflecting the changing nature of consumers’ relationship with the NHS.
In the year of its 65th birthday, people still love the NHS, but they are also realistic about its ability to cope with their increasing needs. They are able and willing to play a part in covering the shortfall, but only if the insurance industry offers them the products and services with which to do so.
Chris Jones is head of product management at FirstAssist Insurances Services (part of Cigna)
