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‘All Insurance Policies Are Created Equal’
During my last years with MedAire Limited UK, a boutique assistance company, I spent a lot of time with insurance brokers and underwriters at Lloyds. My impression from that experience is that the depth of support behind accident and health (A&H) policies were rarely reviewed by consumers, i.e. corporate entities. There tends to be an assumption by some consumers that insurance companies have robust medical support systems if the have a superior credit rating. Hence, price becomes the primary driver for decision making.
Often times, consumer buying behavior becomes pervasive in the sectors they buy from. I would argue this is the case in insurance. Underwriter attitudes towards assistance companies become more about pricing than about the infrastructure designed to support their customers and mitigate losses. Clearly price is an important factor in any decision making process. There are really four factors that should play into an underwriters decision making process for medical assistance. Those factors should be weighed on a like for like basis and are:
- Direct Pricing: Understanding what the assistance company charges regardless of cost containment performance, e.g. retainer fees, case management fees, finance fees etc.
- Customer Support: Understanding case management flow and policies that guide customer interaction, satisfaction and/or dissatisfaction.
- Immediate Medical & Network Support: Understanding the minimum/baseline levels of 24/7 call centre medical staffing, audited preferred provider networks and policies for third party medical support.
- Cost Containment: Understanding the policies and staff training for managing medical treatment and contracts for discounted/preferred pricing, i.e. balancing the medical mix of necessity, prudence and convenience against cost.
I’ve put a line in the sand by stating ‘four factors.’ To a repatriation professional these are just the tip of an auditing/consideration process. My point is simply that the underwriting audit processes can be fairly light and driven by assumptions of suitability, e.g. you serve x number of other insurance providers so you must know what you are doing. Insurance tenders involving switching incumbents can be a war of distinction but as a whole, the London underwriting market would be better served by ‘lifting the covers and going a bit deeper.’ Not only would they find ways to reduce losses they might even find ways of using the assistance company’s strengths/differentiators to improve their policy/product differentiation.
A final note. The majority of all insurance, health or property/casualty is very elastic, i.e. switching costs are minimal, pricing and relationships become the determining buying criteria. Although this has influenced the insurance buying criteria for assistance services there are some insurance companies that are carving out niche programs designed to distinguish their policies over others, e.g. see Ace Business Class Premier Policy This is a perfect example of how an insurer has taken your bog standard accident and health policy and incorporates a wide range of benefits that are meant to enhance their client’s risk mitigation and response, e.g. health, security, dental etc.
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