Health insurance customer relationships weaken

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By: Wise Marketer Staff |

Posted on December 5, 2003

Even though many workers are contracted to specific health insurers through their job, health insurance customers say that the insurers lack customer focus in a number of key areas, leading to weak links in the insurer-consumer relationship, according to a study by Walker Information.

Walker Information's recently published 'Walker Loyalty Report for Health Insurance' suggests that, when it comes to building strong, positive relationships with consumers, health insurance providers have room for improvement. And, according to a soon to be released health insurance study, two out of three consumers indicated that they would readily consider other health insurance offers, while only half said they would recommend their existing insurance provider to others.

Walker Information's own report shows that, although 71% of health insurance consumers are satisfied with their provider, only 30% are considered truly loyal (being happy with and desiring to continue the relationship). But while many health insurance consumers are 'locked in' to their provider because of their job, this loyalty measurement does offer a good indication of the overall health of the relationship between the provider and the customer.

Loyalty findings
"Customer loyalty may not seem as relevant when your customer base is captive, as is the case with many insurance providers, but it will become increasingly important if and when these consumers have the opportunity to weigh up other options, compare offers, and make alternative choices," warned Walker Information's group vice president, Jeff Marr.

Although the measurement of customer loyalty takes customer satisfaction into account, an analysis of loyalty is ultimately determined by key attitudinal factors such as the overall quality of the company, value, brand, and overall cost. In the report, health insurers received relatively low marks in nearly all of these areas. Specifically, the report indicated that:

  • Only 51% of consumers find their health insurance companies easy to do business with.
  • Only 42% believe that their provider cares about customers.
  • Some 54% are positive about the overall quality of their provider's products and services, and 63% responded positively about the overall cost of products and services.
  • Only 54% believe their provider has a good reputation, while 42% think their provider is one of the best brands in the industry.
  • Four out of ten (40%) say their provider offers good value.
  • Only 37% prefer their provider's brand over other brands.

Customer perceptions
Customer views on the leadership and ethics of their health insurance companies also offer some insight into the nature of the relationship. More than half (54%) believe that their health insurance company is financially sound, while only 45% think the company is an industry leader. A mere 40% believe their health insurance provider is highly ethical. Furthermore, only 52% say their provider is a company they can trust.

"Although loyalty to health insurance companies in general is extremely low, some providers have earned much higher levels of loyalty," explained Pam Toft, head of Walker Information's healthcare practice. "Also, the study indicates that consumers older than 54 are more positive about their health insurance providers."

Basic service lacking
According to the survey, health insurance providers also appear to be lagging behind when it comes to basic customer service and support. When questions about plan coverage arise, consumers often have difficulty getting answers and necessary information from their providers, while a little over half of survey respondents said they find it easy to use their benefits. Only half gave companies high marks for customer service support, and more than half (56%) said they have substantial concerns about the quality of information provided by the insurer to help them understand their coverage and benefits.

But while 63% of consumers said the quality of the health care they receive is good, nearly half (48%) admit they sometimes wait to seek health care services due to out-of-pocket costs. With health care and insurance costs escalating, only 39% of consumers feel they will be able to afford health insurance in the next two years.

As part of The Walker Loyalty Report series, a nationally representative panel of customers (at least 25 years old) was surveyed about their perceptions and views of their health insurance provider. A total of 2,121 participants offered observations on the corporate health insurance brand with which they were currently contracted.

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