Private health insurance comparison services engaged with more than 50% of all policy sales
A new survey demonstrates the important role played by comparison services in the private health insurance market, with comparators responsible for more than 200,000 direct sales each year and a further 200,000 consumers annually using their recommendations to then buy directly from funds.
The PHIIA (Private Health Insurance Intermediaries Association) member survey found 2.2 million Australians used their members’ services in 2019. This represents more than 1 in 5 Australian households, an increase of 4.3% from 2018.
Its members, which include large comparison services, such as iSelect and Comparethemarket.com.au, also made a quarter of all policy sales directly, according to analysis of PHIIA’s first ever survey.
“Some 25% of all health insurance sales are made through comparison services directly, however, when combined with the additional 200,000 members who seek a recommendation from us and then go on to buy from a fund, we’re actually instrumental in 50% of all purchases,” says the not-for-profit association’s independent chair Troy Sheahan.
“Our data shows that we help a good proportion of consumers who have never had cover before to enter the market, with comparison services responsible for 28% of new-to-market policies in 2019. This drives a valuable share of the real growth in the market.”
The survey shows intermediaries consistently sell a higher percentage of hospital and combined policies than the industry average. They also sell a higher average annual premium than the average for the funds in effect increasing the level of coverage enjoyed by Australian consumers.
“We believe it’s our members’ level of service and needs analysis which helps consumers make more informed choices. There’s too much commentary about the declining fortunes of the private health insurance market and this survey shows another side of the coin,” says PHIIA CEO Christopher Zinn.
“Given the importance of growing participation, particularly among younger members, funds need to use competitive and cost-effective channels. This demonstrates why funds continue to choose comparison services to attract new members.”