As the health insurance marketplace evolves to a more consumer-oriented model, a number of large health plan providers have taken steps to become more competitive, lower medical costs, increase market share and create innovative consumer-directed products.
In the marketing arena, one significant trend that has emerged in this changing landscape involves the application of licensed “tele-agents” to sell policies directly to consumers over the telephone and the Internet.
Tele-agents can be highly effective when plans are sold directly to the consumer.
With employers trimming workers’ benefits, an increasing number of individuals are purchasing health coverage to supplement or replace employer-based coverage that is insufficient or unaffordable. At the same time, many large companies are now cutting back on health care benefits provided to retirees. As a result, many health plans have sought to capitalize on this trend by actively growing their direct-to-consumer marketing capability.
Medicare Part D and Medicare Advantage plans also lend themselves well to the tele-agent model as, increasingly, the consumer rather than the employer is making the decision to buy the plan of his or her choosing.
Plans cite 4 main reasons why tele-agents make sense:
The telephonic/Internet underwriting sales channels are relatively inexpensive. With plans becoming more competitive, it is no longer cost effective for insurance providers to pay traditional agents an additional 20% to 40% in commission to sell or service these low-margin accounts, compared with tele-agents. Savings with tele-agents are also achieved through lower cost of sales.
2. Mass Distribution.
Tele-agents can handle increased sales volume over the traditional “boots on the street” agent. While in-person agents are limited in the number of customers they can personally touch–especially in rural areas or remote locations that are difficult to reach–tele-agents provide plans with a highly efficient channel for high-volume campaigns. The telephone and Internet generate leads driven by direct marketing campaigns that list a single phone number or Web address.
Tele-agents can be ideal purveyors of member relationship management. There’s a misperception that a Web or telephone interaction cannot be as personal as a face-to-face interaction. However, through sophisticated programs that carry out data integration and analysis, tele-agents have the ability to interact with individuals with a high level of understanding about the member’s lifestyle and health requirements.
These programs also provide tele-agents with details of previous interactions with each member. Building customer loyalty in this manner is critical, particularly for government-sponsored plans, as re-enrollment will be of significance to plan providers next fall when Medicare Part D open enrollment begins again.
Since tele-agents are typically dedicated to one segment of the market, they can be trained in sales and retention strategies designed for specific consumer groups. Some carriers have begun using tele-agents to take calls from individuals wishing to sign up for Medicare Part D and Medicare Advantage plans. These tele-agents are well versed in communicating effectively with senior citizens, who represent a large part of the clientele for those plans.
Does the emergence of tele-agents mean traditional insurance agents will become obsolete? Certainly not. There will always be lines of insurance that are best sold and serviced by traditional agents–life insurance being one of them. Additionally, there will always be employers offering health insurance to their work force in some form. When competitive bids must be submitted and lengthy employer reviews are required, the services of a traditional agent are essential.
In the coming years, it’s very likely that the number of tele-agents will continue to rise, as more health plans seek to capture their advantages. And, just as the Internet has forever transformed the way consumers buy houses and book travel, tele-agents are likely to spur changes in the health insurance marketplace.
The emphasis will surely turn more toward the Internet with tele-agents increasingly relying on Web chat, co-browsing (to help members complete applications and claims forms online) and even streaming video with Web cams, to further personalize interactions with plan members.