Health Insurance – Loyalty through fear or Delight

Here is a sample of direct mail I have been getting the last week:

Seasonal Discount up to 50 % from a top retail chain with whom I have a loyalty card
- An email from the local multiplex informing me of the latest movies playing
- A letter reminding me to renew my health insurance within the next fortnight

Of all the communication received, the last one is a small worry at the back of my head. The deadline for the health insurance renewal is nearing and I need to make a choice. The decision is the same as in the previous year – to go ahead. I have been renewing year on year for the last eight years – without giving much thought to the process. This I suspect is more out of “fear” rather than “satisfaction” if not delight. If truth be told, I have a health insurance cover from my company – but I still prefer to renew the policy that I have been paying for so long. I presume – that should I now change, I stand to lose the benefit due to my continuity and lack of claim.

For the last 8 years that I have been their customer, there has been no interaction from the company save the annual renewal reminder! To be fair – some of the product and distribution innovations prevailing in markets elsewhere in the world are not permitted in the Indian regulatory environment. In spite of this – I feel cheated!

Do companies really not have to worry about competition? From October 2011, The Insurance Regulatory and Development Authority (IRDA) has allowed health insurance portability In order to improve service standards of health insurance. Portability allows customers to shift to another insurance company along with all the accrued benefits such as no claim bonus and waiting period of pre-existing diseases. The fight to retain the customer is therefore a key concern for every Health Insurance Provider.

As I shopped around, I found that several health insurance providers (HIPs) were offering loyalty points which can be redeemed for vouchers, products from their wellness and health partners. One leading company was offering benefits through Independent Service Providers across various services like Pharmacy, Health & Beauty Clinics, Gyms, and Spas etc. Another offered Health Checkup Coupons for customers who had renewed for more than three years regardless of claim. Loyalty programs alone wouldn’t be sufficient. Innovative products and high service standards would be crucial in attracting and maintaining customers. My provider seemed to be doing nothing of the sort. Health Insurance could be fun – rewarding too! If only my insurer had thought of it too.

When we talk to organisations – they all want to know – “How can I  Improve Persistency”. At the grass-root level, the focus is  on getting the contact information right and as much contact information as possible. This is seen as a pathway to improved Persistency – but in my opinion not necessarily “Loyalty”.

Health Insurance companies are more worried about eroding profitability due to false claims. On checking websites – I find a little more positive approach from HIPs – they have offers for loyal customers in spite of claims! Worry about the bad ones should not prevent faith in good customers. Treating Customers individually on the basis of their overall interactions is the true way to loyalty. Capturing these interactions pre-claim, claim – experience, post-claim, chatter on sites and mining them will enable the HIPs to engage with the customer at an individual level. Additionally, companies should mine physician and hospital records along with customer data – to prevent risk and ensure better claim management so that honest customers don’t have a bad experience.

I have a few days more before I have to make the choice. This time – I will be shopping.

 

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