How to Find Your Sustainable Competitive Advantage in Health Insurance

Sustainable Competitive Advantage in Health Insurance

Sustainable Competitive Advantage in Health InsuranceThe next Open Enrollment period is only a few months away — put Nov. 1 on your calendar now if you haven’t already. So what better time to start thinking about how you’ll maximize fall growth for your insurance sales business? Unfortunately, the insurance business isn’t getting any easier — making finding your sustainable competitive advantage all the more important.

It’s been a near constant state of upheaval for the health insurance industry for years now. More than a decade ago, the digital revolution changed how insurance was bought and sold. Since 2010, numerous changes have swept the industry through Obamacare (The Affordable Care Act), including the rollout of the Individual Mandate and the Shared Responsibility Payment.

As we enter the 2017 Open Enrollment this fall, issues of rising care costs are front and center. Selling in such an environment takes skill, but these are skills I know many of you possess. It’s just a matter of finding and selling on your sustainable competitive advantage.

ACA Insurer Rate Requests Are Coming In High

Pricing is likely to be a key issue for health insurance consumers in the coming years. There were already notable hikes for some customers in 2016 as far as premium costs and deductible levels were concerned. Still more changes are on the way. According to a recent report from investment website The Motley Fool:  

UnitedHealth Group, the largest insurer in the U.S., recently announced that it would be vacating a majority of the 34 states it’s currently operating in beginning in 2017. The reason? Higher member utilization rates and the ease with which consumers can change health plans are set to cause UnitedHealth to lose around $500 million on its Obamacare individual marketplace plans in 2016. We’re talking about the largest U.S. health insurer — a company that’s versed in how to sustain profitability — waving the white flag in most states.

The same article notes that more than half of Obamacare-approved healthcare co-ops shut down in 2015 due to losses and that Humana, another large U.S. insurer, may join UnitedHealth and exit state health insurance exchanges.

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Insurer rate request for 2017, which must be approved by state Office of Insurance Commissioners, are also coming in. The Motley Fool reports some eye-opening numbers:

  • Aetna’s Virginia-based plans included rate hike proposals of 13% and 16.6% above current levels.
  • One Virginian Anthem Blue Cross Blue Shield component is asking for an increase of 15.8% on average.
  • In Oregon, Providence Health Plan is asking for an average rate hike increase of 29.6%.
  • Moda Health Plan and Oregon’s Health Co-Op are asking for 32% hikes!

What Insurance Pricing Means for Your Business

These are big requests. And since they’re “preliminary” and “requests” there’s a good chance the real rate hikes will be less severe — this time. However, what is certain is that the era of low insurance premiums the ACA was supposed to usher in is over. For insurance brokers, competing on price will become an increasingly dicey strategy.

Instead, customer-centered service will be the winning strategy to keep your clients and grow your business. That’s because customer-centered service is sustainable — you can do this with every client, long term. And it’s competitive — the service you offer will be unique to you and valuable for your clients.

Three Strategies for a Sustainable Competitive Advantage

Now, this is not a new idea. In fact, as online insurance sales were overtaking the industry more than a decade ago, Insurance Journal identified three service areas as the key to maintaining a client roster and growing a business. These specific strategies apply just as much to the current environment.

Strategy 1 – Finding the Hidden Problem

When you are listening to your clients and prospects, you should be listening to what’s not working. Does an employer have coverages spread across several different vendors, for instance? A diagnostic mindset could help you ferret out hidden problems, to which you then offer solutions. This is a very valuable sales trait.

Strategy 2 – Developing Above-and-Beyond Solutions

Some solutions aren’t just hidden. Sometimes what a client wants could be detrimental, due to a misunderstanding of hidden costs or coverage. Sure, an average agent could sell the solution the client is asking for, but an extraordinary agent will sell them a solution that goes above and beyond, adding real value.

Strategy 3 – Letting the Client Define Excellency

Adding value to a customer’s experience isn’t just about what you think is top service or a worthwhile ROI. Listen to what your clients tell you they value — and give it to them. It may be responsiveness, clarity, personability, or something else. Provide the right value to your client and you’ll enjoy advantages that are competitive and sustainable for years to come.

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About Troy Wilson