PRINT PAGE

SME private medical insurance - Getting it right for brokers

From online quotation portals to simply being able to get through to someone who knows what they are talking about, brokers operating in the SME sphere know what they want from insurers. Madeleine Davies finds out who is meeting their expectations

July 2010 Features

When Discovery announced its acquisition of Standard Life Healthcare (SLH) in May this year group chief financial officer Richard Farber told Health Insurance that a factor “normally low on the priorities list” had influenced the company’s bid: good old-fashioned customer service. “Standard Life Healthcare is a fantastic asset around people and operations,” he said. “The customer experience is very good and we want to keep that going.” His comments echoed those of intermediaries reacting to the deal.

“Standard Life Healthcare has always had an enviable reputation in the market for providing excellent customer service to their clients,” Richard Holden, compliance director at national specialist intermediary Chase Templeton, told us, urging PruHealth to “maintain these high expectations moving forward.”

Of course, it is not only the expectations of customers that private medical insurers have to meet, but those of the broker channel. This is perhaps particularly challenging in the highly competitive SME sphere in which they must balance the provision of a personal service with demands for a speedy turn-around and efficient systems.

BIG V SMALL

Alistair Sclare, healthcare director at insurer Groupama Healthcare, is well placed to comment on walking this particular tightrope having secured the gong for best customer service at last year’s Health Insurance Awards.

“As a small provider we feel that service differentiation is something that enables us to compete with bigger players who may be a little less agile,” he says. This view seems to be borne out by the intermediary experience. Paula Aitken, commercial manager at health insurance consultancy The Private Health Partnership (PHP), believes that Grouapama “stands heads and shoulders above the rest for consistently high levels of customers service”, followed by SLH, “leaving the others far behind.”

“We asked intermediaries what it was we needed to do and we go back to confirm we have done it,” continues Sclare. “When we haven’t succeeded we have gone to them and asked why not.”

Following Sclare’s example, Health Insurance spoke to four intermediaries operating in the SME sphere about what matters most to them.

ONLINE CAPABILITY

“Insurers’ online offerings vary in ability but the better ones allow you to get your own quotes, download renewal terms and make amendments to a policy or place a group on cover pending underwriting,” says PHP’s Aitken. “The sites store-up to date literature which assists the broker in ensuring that out of date literature is not given to the clients and negates the need to keep piles of literature which tends to date.”

Both Chase Templeton’s Holden and Peter Lurie of intermediary Proactive Medical & Life singled out Health-on-line for praise. The online provider, underwritten by AXA PPP healthcare, enables brokers to obtain quotations for personal and company plans immediately and submit new business electronically with no need for paperwork.

Many of the providers Health Insurance spoke to are in the process of upgrading their online offerings for brokers. Groupama is launching EasyAdmin 2 which, in addition to enabling brokers to download literature and make mid-term adjustments to schemes, will provide all renewals and allow brokers to access replacement certificates and P11D statements.

AXA PPP healthcare’s director of sales and client relationships Paul Moulton says the insurer’s primary focus is on developing extranet sites for intermediaries and group secretaries. The next stage is the roll-out of a secure member website where individual members of schemes will be able to access personal documents with their membership details and underwriting terms. For brokers, a real-time administration system will be extended from the corporate to the SME arena.

PruHealth, meanwhile, enables both employers and advisers to not only carry out key administrative tasks online such as membership updates but access management information about the wellness profile of the scheme’s membership. Members can also submit claims online. David Castling, intermediary distribution manager at National Friendly, says the provider is also going through an online upgrade at the moment which means that by the end of year an online group quote tool will be up and running

ONLINE QUOTATION

Arguably one of the most advanced providers in terms of online capability, Aviva is proud of its e-solutions platform which allows brokers to quote and apply for cover online. While head of intermediary sales Nick Reynolds admits that the SME version has suffered some technical glitches in the past he is confident that these have now been ironed out. Notably, Chase Templeton’s Holden believes that Aviva has “improved significantly over recent times” with regard to service.

“We think it’s the way of the future and believe that Aviva is going to be a digital insurer,” continues Reynolds. The next stage of the project will be to enable advisers to make live changes to schemes, with the aim of rolling it out to as many intermediary businesses as want it by the end of the year.

Other insurers are divided on the importance of being able to quote and apply online. AXA PPP healthcare’s Moulton, for example, says the insurer has explored an automatic quote online facility but found that there were too many variables involved. Dave Priestley, sales director at PruHealth, says broker feedback suggests they would prefer to send quotes to insurers on email rather than logging onto multiple different sites to enter data.

“Until there is a consolidated central quote platform – one thing that has been much debated – the existing method will continue,” he says.

Groupama’s Sclare believes that pmiConnect – the common electronic quotation system operated by Healthcode – is the way forward. “If we all develop different systems that is horrendously inefficient and runs risks of inaccuracies and mistakes”, he says. “We think an online quotation portal would be a very big and positive step forward but there needs to be one and at the moment that looks like being pmiConnect and we are very much in support of them.”

A FACE AND A NAME

While brokers expect the efficiencies of online systems they are also keen to stress the value of dedicated personnel.

“It’s important that there is a point of contact with whom the broker can deal with at the insurer and that they deliver on their promises within the expected timeframes,” says Chase Templeton’s Holden. He believes that attrition of account managers causes issue for brokers because it takes time to build a relationship with them. “Insurers may need to offer greater consideration to the volume of accounts their account managers are asked to look after,” he suggests. “Less accounts would allow greater concentration, more time to develop key relationships and ultimately they would reap the rewards of being able to generate new business.”

“It is so important to have a dedicated, knowledgeable person at the end of the line every time,” adds Proactive Medical & Life’s Lurie.

Comments from insurers on this issue raised the issue of broker segmentation and the fact that some differentiate service levels according to the volumes of business generated by different firms.

“It would be naive to imagine there is not differentiation of service across the total agency base of any insurer,” says Groupama’s Sclare. “We seek out agents that operate in a way that fits with our business model. Not all brokers are going to like the model we use. We are happy to provide any broker large or small with a service that is pretty much the same if they are going to work with us in way we think will be fruitful. Those that you work best with tend to grow. We don’t push anyone to back of the pile on turnaround times but there has to be some differentiation, it’s just common sense.”

It’s a view echoed by AXA PPP healthcare’s Moulton. “We try and provide as personalised a service as we can but the reality is that a named or dedicated person or team is more easily constructed where large volumes of business are involved,” he explains. “For proactive brokers who have a number of transactions, quotes and renewals, we do have a named person within named dedicated teams. Brokers are segmented but they should only end up in one team although that may be made up of six people. They can build up a pretty good relationship with a limited number of people.”

Proactive Medical & Life’s Lurie has noticed a “very big change” at PruHealth since it segmented its brokers and allocated them to dedicated teams. He believes this is already resulting in quicker responses.

“Previously we were silo-ing support staff into new business or renewals or administration but we have now reorganised so that each broker will be supported by one team of people,” explains Priestley. “There is one telephone number and email for them and feedback has been very positive so far.”

By contrast, National Friendly has a single team that deals with every broker query, regardless of firm size.

“Everyone has the same level of service,” says intermediary distribution manager Castling. “I think it comes down to economies of scale. If you are a really large insurer with a team of 20 service guys you can struggle with the issue of accountability; with a small team that is never going to be an issue.”

Linked to contact with personnel is the thorny issue of service support based overseas. Proactive Medical & Life’s Lurie believes this will be a “huge issue” for PruHealth following the acquisition of SLH which has UK-based service centres (PruHealth’s broker support teams are currently all based in South Africa).

PruHealth’s Priestley says the insurer has had “a lot” of conversations with brokers on this issue. “When you have proper conversation not an emotional one you have the point that it does not matter where the service is it just needs to be delivered well,” he concludes. “The question is whether it is possible to achieve those standards through an offshore servicing set up. We would argue that it is. It is really about having good people who understand who they are servicing – I think that is more important than the geography and that is what we intend to achieve through the new model.”

QUOTE TURN-AROUND TIMES

“Generally insurance companies will provide quotes in a reasonable amount of time,” says John Crisford, director at specialist healthcare intermediary Sherwood Healthcare. “The problem is if you want to go back and make adjustments, which can take a further few days.”

Chase Templeton’s Holden observation that quote turnaround times can “vary dramatically” across insurers is borne out by comments from insurers. Holden also believes that this is an area in which most could make improvements.

Groupama has a 48-hour turnaround time. “We believe we have to provide that level of service but as an insurer it slightly irks me that we are required to provide that service because there is so much other slack within the service,” says Sclare, citing the negotiation process and the fact that other insurers fail to provide similarly speedy turnarounds.

“Obtaining the ‘best quote’ at the first time of asking undoubtedly benefits the broker rather than having to indulge in a ‘dutch auction’ at the eleventh hour, which undermines trust both in the broker/insurer relationship and in the arguably more important broker/client relationship,” says Holden. “We are seeing this more and more in the ultra competitive SME arena.”

Moulton says that AXA PPP healthcare “does not deliver vanilla to everyone.” Service standards, include turnaround time, are aligned to broker segments, so that for some they can expect a quote within 24 hours while others may have to wait longer. He points out that in the SME space between 50 and 100 brokers give AXA PPP healthcare more than 90% of its business.

Aviva offers an impressive 24-hour quote turnaround as standard, with no differentiation between brokers and PruHealth aims to get all SME quotes out within two days.

Lurie believes that proactively keeping a good relationship with insurers is important. “You have to be phoning them, speaking to them”, he reports. “I will send out an email to various insurers and some get back within 12 hours of 48 hours but some don’t bother for another week or so. It depends on how you word the email and if you speak to them.”

STANDARDISATION

“Much more could be achieved if insurers talked more to each other,” believes PHP’s Paula Aitken. “It is possible to have more transparent industry guidelines which relate to areas of commonality but for each of them to compete as individual insurers.” She gave examples including a standard approach to secure email systems, claims sharing and what is, or is not, written on members’ certificates. Sherwood Healthcare’s John Crisford believes that a standard template for policy certificates would make transfers more straightforward. All the insurers agreed with the principle although the fact that it has been on the agenda of broker bodies the Association of Medical Insurance Intermediaries (AMII) and the British Insurers Brokers Association (BIBA) for some time now raises questions about their sense of urgency. Groupama’s Sclare says he is “fully in support” of moves to make the process of transferring business more efficient but questions whether competitors share his point of view. “Some do not see efficient movement of business around the market as a positive step,” he surmises.

It’s a telling comment that highlights the challenge of meeting broker demands for greater efficiency without giving away competitive advantage. In the meantime, Sclare is concentrating on retaining the crown for customer service in October.

“The point I made to our teams was that winning it was quite difficult and we are delighted we have done so but retaining it will be even more difficult,” he concludes.

WPA’S ONLINE PROGRESS

WPA’s iZone portal enables brokers and insurers to exchange information and tasks to carry out key functions such as viewing or downloading reports and literature, highlighting pending renewals, contacting members about to leave schemes with continuation options and making transfers easy. It also contains an online quote and buy facility and a new business tracker showing the progress of applications. For corporate ‘take-ons’, brokers can also send a spreadsheet with employee details to WPA and monitor the status of the policy online as WPA creates new, or updates existing schemes and instruct providers to release underwriting certificates. I-zone automatically updates group secretaries and brokers as to the status of their policy take-on as well as enabling group secretaries to administer their scheme online from membership lists to P11d reports.