Forrester on Individual Health Market

It is a few months old, but Forrester put out a report called “The $115 Billion Individual Health Insurance Opportunity” back in October of this year that is packed with facts and a few interesting concepts. The key point is that established companies need to maintain success in the B2B world that we live in today while aggressively migrating processes, collateral, skills, and products to work in the B2C market.

I was definitely surprised by their statistic that 9% of today’s market is made up of individuals purchasing their own insurance and that 20% of the population is either in a high deductible or CDHC plan. Their data also says that 31% of the uninsured are actively investigating insurance. Obviously, this means a lot of people looking for health information and taking more responsibility for their care.

They offer 3 recommendations:

  1. Get ahead of the legislative curve. I would agree. Companies should be out testing models right now with the early adopters. [One of my favorite quotes from one of the founders of IDEO goes something like ‘fail early to succeed sooner’.]
  2. Develop and launch innovative plan designs. They talk about Prudential’s “pay-as-you-go” model in Europe and American Community Mutual Insurance in Michigan that has a buy-up plan that you can buy after you get sick. WOW!! I am not sure how you underwrite this, but it sounds very interesting.
  3. Invest in low cost distribution channels. They talk about Tonik which I mentioned before and the building of online presence. They also talk about outsourcing.

One of the big things that this will all require is some rebuilding of infrastructure to support different sales processes, personalization, claims set-up, and customer support. Companies should also be looking at data and how they can better use and mine data to learn and improve.

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