What health insurance can learn from life and auto insurance

The process of buying health insurance has never been an easy one. Rarely is it a pleasant process, either. But a wave of consumerism has swept over health insurance, thanks to the rising popularity of individual health insurance plans and the increasingly personalized nature of retail, travel, hospitality and even other types of insurance.

The health insurance industry could learn a thing or two from other industries about how to make the process of purchasing coverage more personalized and convenient for consumers. FierceHealthPayer rounded up examples from the life and auto industries to shed light on how payers can earn members' trust and make the customer experience quicker and more enjoyable.

Gain members trust to access their data

New Zealand-based life insurance company Discovery keeps tabs on its members' activities by rewarding members with points each time they swipe their gym card or play a round of golf, reported the New York Times.

In exchange for sharing medical information such as exercise habits and cholesterol levels, members receive points that, in turn, provide a certain percentage amount back on life insurance premiums.

The concept now is coming stateside. Life insurer John Hancock introduced a similar program recently through its partnership with Vitality, a global wellness company that works with employers and health insurance companies. The idea, as the Times pointed out, has the potential to transform the way life insurance is priced. However, there's one catch: Consumers have to willingly share their health data.

Vitality recognized potential hesitation from consumers to dish out their personal data and based the number of points assigned to a particular activity on how it will influence an individual's longevity. The more complex a behavioral change, the more points it will earn. This may incentivize consumers to share information not only receive a discount, but to improve their overall health as well. 

"People respond far more to immediate gratification than delayed gratification," Kevin Volpp, director of the Center for Health Incentives and Behavioral Economics at the Leonard Davis Institute, told the Times.

While health insurers already have toyed with this concept--Oscar Health, for instance, sends members a free Misfit Flash to help measure and increase physical activity--payers need to establish more trusting relationships with their members and ensure them that their personal information is secure to ensure that such initiatives will take off. 

Cut time in half for purchasing coverage

MetLife Auto & Home--which offers auto, home, dental and vision coverage, among others--recognized it was not communicating effectively with potential members. The company's largest offering, auto insurance, is a complex purchase for many consumers. 

Scott Kuczmarski, senior vice president of the group business, told Insurance Networking News that consumers look for three key things when purchasing auto insurance: Cost, convenience and whether they're getting their money's worth.

The company turned to technology to cater to members' needs. Through a project called Xcelerate--which stemmed from MetLife wanting to give customers a quote without having to ask for more information--the company tied together several data sources it already had access to, such as a customer's name and address information, as well as the same data sources that were used to validate the information.

Thanks to state motor vehicle record bureaus, MetLife could pre-fill most demographic information for whomever was requesting a quote--the customer merely had to point out any discrepancies involving his or her information. Once submitted, MetLife assessed the data bureaus and supplied the customer with a quote in about two minutes as opposed to 20, Kuczmarski said.

When it comes to purchasing coverage--whether it be life, auto or health insurance--consumers don't want to spend hours seeking out their best options. 

Not only will cutting down the time it takes to purchase coverage prove more effective for consumers, it can also help drive down costs. Last year, New York Attorney General Eric Schneiderman urged 15 insurers in New York to let certain members buy specialty drugs at retail pharmacies instead of through mail-order services, FierceHealthPayer previously reported. If payers can locate convenient pharmacy stores, it can help members avoid hefty out-of-pocket fees. 

For more:
- here's the New York Times article
- check out the Insurance News Net piece