Consumer expectations havedecidedly pivoted towards an e-commerce experience that guaranteesvalue. Yet, in spite of the high level of complexity, healthinsurance have largely remained the exception — until now. Beloware three lessons health insurance incumbents can learn from theauto insurance industry to better meet customer expectations, boost sales, and ensurelong-term competitiveness.
One price doesn't fit all
Auto insurers like Progressive, Allstate, and StateFarm are using the Internet of Things (IoT) to monitor behavior —driver habits, changes in speed, how often they drive, and the timeof day they drive are just a few examples. The hope is that doingso reduces costs by more accurately pricing driver risk. Forconsumers, this is a strong incentive to drive well and maintainlower premium rates.
This behavior-based model is a great example forhealth insurance companies in their product and pricing models forhealth plans. Walking 10,000 steps a day, getting an annualcheckup, and other health-related behaviors can be a goodindication that overall health can be incorporated into innovativebehavior-based health insurance products.
This is particularly appealing to millennials, forwhom wellness is a daily activity. Recent Goldman Sachs research indicates thatmillennials are exercising more, eating better, and smoking lessthan previous generations. This generation is using apps to tracktraining and nutrition data, which can be incorporated into riskassessments to help insurers stay competitive. This data alsopresents insurers with more opportunities to incentivize healthybehaviors by rewarding members who reach certain milestones.
Insurance shopping has to be an onlineexperience
Insurance is complicated, and there are many factorsthat go into understanding the value of coverage. For consumers,choosing the best plan for your needs is much simpler whenmarketplace comparisons can be made. In the auto insurance world,such comparisons exist. For example, NerdWallet allows users tocompare quotes from multiple car insurance companies at once.Comparing exactly what is being offered — and at what price —simplifies the process of choosing a provider and plan.
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