The rise of price comparison websites is providing a rich range of benefits for South African medical schemes and their members.
Price comparison websites, or aggregators, continue to disrupt the insurance industry. According to a recent McKinsey & Company study, “working with such aggregators can be a preferable option to insurers that are wary of investing in the purely direct space”. Medical insurers have known this for years, and continue to enjoy the benefits of partnering with aggregator sites like Hippo.co.za.
There are four key reasons why – and those reasons have everything to do with the unique nature of the digital comparison platform.
Younger, healthier audience
“With aggregators, our audience is younger and healthier – and that user profile is important to the long-term sustainability of any medical scheme,” says Alexia Graham, Director at Hippo Advisory Services. “Medical schemes need to constantly attract those younger, healthier lives because if they don’t, their risk base will age by a year every year.” As people get older, their medical expenses tend to increase and they tend to claim more from their medical schemes. That, in turn, puts pressure on the medical scheme’s reserves, which ultimately impacts members’ monthly premiums.
“The second reason medical schemes love aggregator sites is because of their efficient integration process,” Graham says. In Hippo.co.za’s case, the consumer will compare and choose the best medical scheme for their unique needs. The application is then completed over the telephone, with no onerous paperwork. “Instead of completing dozens of pages manually and sending those to the medical scheme with copies of your ID and your children’s birth certificates, the aggregator’s agent will complete the application over the phone, then send it to the medical scheme, where the medical scheme’s software will either accept it automatically or with underwriting conditions,” Graham explains. “It’s a very efficient new business process for the medical scheme, and it’s a lot more convenient for the user.”
Thirdly, comparison platforms can assist medical schemes with valuable user behaviour information. “Medical schemes often come to us when they’re changing their products for the new year,” says Graham. “They’ll ask for input on their product design, based on depersonalised demographic information that we have about our customers.”
Comparison platforms also have access to user preferences, which are very useful in shaping the medical scheme’s product development. “We can give them an indication of the type of medical aid options that our users tend to select,” Graham says. “Is it a hospital plan, or is it a hospital plan with a bit of out-of-hospital cover, or are they going for the top-end plans? At what point in the product selection process are we losing them? We can share insights around that user journey.”
It’s not just medical schemes that benefit from the ease of use that aggregator sites provide. Consumers also enjoy better – and simpler – decisions through side-by-side comparisons.
“Medical insurance is complicated,” says Graham, “and if you had to sit with brochures from each South African medical scheme, you’d find that there are no standardised industry terminologies. Each medical scheme also has its own rates, and unless you get into the details, you wouldn’t know that.”
To that end, Hippo.co.za has developed standardised terminology which makes the user’s decision-making process easier. “We’ve implemented a ranking system for the richness of the benefit components within each product, and our comparison platform calls attention to that,” says Graham. “It’s important to simplify the jargon for consumers who are making decisions about their medical insurance. Online aggregators are perfectly positioned to offer that ease of use – both for medical schemes and for their clients.”
* This article does not constitute advice. Medical Aid comparison is powered by Hippo Advisory Services (Pty) Ltd, FSP No. 36088.
Established in 2007, Hippo.co.za helps South African consumers save money by comparing a range of South African providers across financial products such as Car Insurance, Household Insurance, Life Insurance, Medical Aid and more. Hippo.co.za is free to use and saves consumers the time and hassle of shopping around for the best deal, since the Hippo.co.za website instantly retrieves real-time quotes from the different providers using the latest internet technology. You could save by using Hippo.co.za to compare before you buy or switch to a new provider.
Hippo.co.za makes money by simply charging its partners a fee when a customer chooses to find out more about their products. The results consumers see, and the order in which they are presented, are in no way influenced by the fee Hippo.co.za charges its partners or any factors other than the price of the product being compared. The arrangement Hippo.co.za has with its partners ensures that the price you see is the same you would be offered by the partner when using the same criteria.
For more information, visit us at www.hippo.co.za, connect with Hippo.co.za on LinkedIn, like us on Facebook, and follow us on Twitter, YouTube and Instagram.
Hippo Comparative Services (Pty) Ltd is an authorised financial services provider (FSP number: 16357). Terms and conditions apply.