Choosy Insurance Choosers Choose …? • THINK Global Research

“Universal health care” has been a hot topic around the world in the 21st century. And while the American population still fights for it, Australian residents have had access to Medicare for four decades (lucky us…). Interestingly however, an American relative of mine recently posed the question: “Why do half of the Australian population pay for private health insurance when they have access to universal health care?”

As Australians we all know the motivating factors for obtaining private health insurance. Of course there’s the ever-over-arching bottom line. High-income earners are likely purchase private health cover to avoid the Medicare levy surcharge and those aged 31 years+ do so to avoid paying the lifetime health cover loading. Then there are the people that pay for shorter waiting times, a greater choice of care, an increased sense of security, and to reduce the burden on the social system. So in spite of universal health care access there is evidently still a substantial market in Australia for private health cover. People are now spoiled for choice when it comes to insurance providers, so much so that if consumers want to compare they can choose from an array of dedicated insurance comparison sites. These comparison sites generally compare practical aspects of insurance policies, but how does a customer decide on a provider?

Research has shown that product reviews and word-of-mouth recommendations can create greater product consideration than many other methods. However, it also shows that people are only likely to review a product without prompting if they are at either end of the extreme in terms of satisfaction. So at which extreme do customers generally sit when they take the time to review health insurance?

To find a somewhat simplistic answer to this question, I went online to, “Australia’s first and most comprehensive consumer opinion site”.

The pattern of responses reflected what is already known about online review behavior, with more than three quarters of responses at either extreme of the satisfaction spectrum. Interestingly, when it comes to health insurance customers are much more likely to review a provider after a negative experience than a positive one, with approximately half of the consumers rating their insurance agency as terrible. By contrast, just over a quarter of consumers rated their provider as excellent.

Having said this, the average overall rating of 11 of the 31 providers was better than just “okay”, and there were 3 companies with 3+ reviews that had been rated as good to excellent.

After finding the answer to my original question and coming to these conclusions, I simply found myself with more questions. How does an insurance provider find themselves in the top 3? Are these ratings reflective of overall satisfaction rates between providers? Which type of insurance customer is most likely to write a review? Is there anything a company can do to increase review scores? How much would being in the top 3 impact policy sales?

These questions are considerably harder to answer, but that’s no reason not to ask.

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