Ideas & musings about consumer behaviour

Aggregators secure 20% of private health insurance telephone sales

The appeal of comparison companies shows no sign of abating with customers appreciating the ease and convenience in which they can obtain private health insurance.

The Australian Private Health Insurance (PHI) industry is as competitive as ever with funds going head-to-head with the very comparison companies that are often enlisted to promote their policies. A recent report by Global Reviews looked at the contact centre sales effectiveness of standalone funds versus their aggregator counterparts.

The Global Reviews study revealed how comparison companies are able to secure more than 20% of PHI sales which is no small feat in an industry that last year reported a $1.17 billion profit.

With most customers likely to shop around for the best deal before signing up for a policy, comparison companies can serve as a time-saving one-stop-shop and are proving increasingly popular with consumers.

HCF however, remains the industry leader for PHI phone sales with a performance rating of 71% but the margin between HCF and competitors is narrowing, with aggregators Choosi improving performance since previous quarters at 67.9% and iSelect close behind on 67.5%.
figure 2 PHI

According to Peter Grist, Managing Partner of Global Reviews, the private health insurance industry is leading other sectors with a performance rating of 65.9% ahead of the mortgage industry on 54.8%.

“Many companies are showing improvement in their ability to recommend a policy that meets the customer’s needs and then confidently invite them to commit to the policy.” Grist said.

“The private health insurance industry performs well as it successfully incorporates a needs discovery line of questioning into the quote generation process”

Plotting the rates at which standalone funds meet key sales criteria, against comparison companies indicates that both sectors apply similar sales methodologies, with the only notable difference to customer experience being comparison companies’ propensity to place the customer on hold mid-way through the conversation which does not represent best practice and can adversely affect customer experience.

Figure 4 full page

Companies can convey a customer-centric attitude by staying on the line whilst the ‘search’ is carried out, thereby building rapport. Agents would also be encouraged to speed-up the process of deciding on the most suitable policy.

There is significant disparity between the average call handling times of comparison companies compared to standalone funds. Comparison companies placing the customer on hold whilst they ‘search’ for a suitable policy has resulted in an average call length 1.7 minutes greater than that of a standalone fund.

“Given that customers are just as able to access easy-to-use online search tools, placing the customer on hold seems superfluous to the process and is undoubtedly affecting operational efficiencies.” said Grist.

In fact, the additional 1.7 minutes per call theoretically represents an opportunity cost of nine calls per agent per day. In a small contact centre of 50 agents, an additional 450 calls could be taken per day, or the extra time spent more productively undertaking other tasks.

The private health insurance industry summary report can be downloaded free by clicking here

Find out more about Telephone Sales Benchmark

For more information on this study and the information we currently have on your company and competitors, please contact:

Leonardo Arantes
Commercial Director (Contact Centre & Retail)
T: +61 3 9982 3418
M: +61 429 347 637
E: leonardo.arantes@globalreviews.com

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