The health insurance companies are continuously expanding their product range – also outside the health sector.
In a hotly contested health insurance market, insurance companies no longer focus on looking for new customers, but on retaining existing customers. They intend to improve customer support, increase policyholder loyalty and thus avoid customer churn – on the back of the significant premium increases announced for next year.
The branch agreement, which is valid from 1eh January 2021, concluded between the health insurance companies regarding insurance intermediaries (in German: BVV), showed that the upper limit for remuneration of external intermediaries was too low. Under the new directives, they can no longer work profitably and the cap on commissions received leads to a transfer of insurance brokerage to the more expensive internal sales department, which is not affected by the branch agreement. In the meantime, it turned out that the health insurers’ own prospecting service does not generate sufficient revenue, which is why they are strengthening support for their existing customers and implementing better loyalty systems (retention management).
Lifestyle or competition?
Basically, health insurance companies have every interest in entering into and supporting compulsory health insurance contracts (AOS). With the help of supplementary insurance, they can supplement the mandatory basic insurance and thus increase the amount of premiums. Supplementary insurances that also include lifestyle products, such as Completa Extra from Helsana, Completa Top/Praeventa from Swica or SD Premium from Groupe Mutuel, are enjoying increasing popularity. These offers include special forms of treatment and complementary therapies, fitness subscriptions, contributions to dental hygiene, nursing services or temporary household help.
Many customers appreciate this kind of service. The outsourcing of external intermediaries, the development of the own external service and the expanded offer of supplementary insurance to build customer loyalty, these are all developments caused by the interprofessional agreement and which are detrimental to competition.
Increase premium volume through additional products
The health insurance companies are increasingly including products that have no connection with prevention and traditional health care in their range of services. With a good position in this area, they can thus increase customer loyalty and at the same time increase the amount of premiums, including for intermediaries.
Policyholders are ready to integrate such coverage because it allows them to have only one interlocutor and also pay monthly premiums, which is hardly possible with private insurance companies due to the often low premium amount to be paid. Legal protection and travel insurance are already part of the standard offer of health insurance, and more and more often we see household, liability and life insurance being added.
For vehicle insurance, premium prices are more complicated. But there are also already ‘white label’ solutions, that is software developed by private insurance companies and which the health insurance funds offer under their own name. Last but not least, these products allow traditional health insurers to truly compete with private insurers.
Digital loyalty is gaining ground
User-friendly apps and other digital services are also an effective way to build customer loyalty. Today, these services are in demand by customers as they provide quick access, 24 hours a day, to their own data and insurance products, as well as easy handling of invoices. Simple requests can be processed digitally, which is a significant comfort for many customers, especially when it comes to having to resort to services.
For policyholders, the increased focus on customer loyalty and integration of new insurance products therefore has clear advantages. However, it should not be forgotten that this development also entails a gradual disappearance of proactive and neutral advice, as it is or was provided by external mediators. This is problematic, because it is only by using independent advisers that customers can really gain access to all the existing insurance solutions.