He explained that given the fund’s focus on data science and broader health services, it makes sense to offer them to those who haven’t yet purchased health insurance.
“If what we sell to people—particularly our younger members—has to do with their understanding of their individual health profile and linking them to products and services. [as it is insurance]We think that would be an attractive value proposition.”
The fund calls this approach a “freemium” model — a phrase that relates more easily to software or fintech products than it does to insurance.
But just as the banking sector has shifted to the new digital offerings in the face of fintech disruptions, insurers are preparing to bring their offerings more in line with the on-demand economy.
Like a nib, health insurance giant HCF launched its own health insurance giant earlier this month — casualty insurance company Flip.
Run by a 10-person team led by Millennial CEOs Kathleen Weaver and Chris Burrett, Flip allows users to purchase insurance to cover them for short periods of time, at $6 per day or $9 per week.
“We wanted to bring more models of Netflix and Spotify to the industry, and let people play it when they need it.”
Chief Petty Officer Chris Burrett
The business is geared towards young people who may need coverage when participating in sporting events, hiking or other risky activities. The startup will pay a direct cash amount to members upon their stay and they can prove injury and diagnosis, covering basics such as sprains, broken bones or accidents requiring dental care.
Burritt said the company is focused on bringing on-demand business dynamics to the insurance sector.
“We wanted to bring more models of Netflix and Spotify to the industry, and let people play it when they need it,” he said.
He said that getting the attention of young people is a challenge for insurance companies because many of their health concerns are linked to individual events, such as active sports, which make taking broad policies less attractive.
“When you combine that with complicated, expensive, and hard-to-understand private health insurance, it’s no surprise that they haven’t picked it up and don’t have fond feelings for it,” Burrett said.
Ms Weaver said the company wanted to create an offering suitable for people in their 20s, although there were hopes that it would make them aware of the idea of taking out insurance as they get older and create a need for broader health coverage in the future.
“We tried to keep the prices as affordable as possible — we compared them to avocados on toast, or the number of coffees,” she said. “We would like to stay [people] In the HCF ecosystem [beyond their 20s] So we hope there will be enough link to get back to our nation.”
While the coronavirus pandemic has highlighted the affordability of private coverage, the sector is seeing encouraging signs of growing demand for its services.
ASX-listed Medibank Private surprised the market again in August when it revealed that despite industry concerns about attracting younger members, the youth group helped drive the fund’s policyholder growth of 4.6 percent for 2021.
It was the company’s youth-focused brand, ahm, that provided a boost as membership jumped 10.9 percent for the year. Ahm offers include a gapless dental-only add-on package and 50 percent off add-ons for about $3 per week.
As CEO David Kojkar said to this masthead earlier in the year, keeping product prices affordable is key to retaining youth.
Younger clients want peace of mind [from cover], but they also want to see more value.” “We need to make sure that we are doing everything we can to ensure that private health insurance is affordable.”
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