Profiling tool personalises health fund premiums

By Danielle Mulligan20 Apr 2015

A new health cover profiling tool that enables insurers to personalise quotes using household spending habits in the areas policyholders live, work and play is set to transform the industry.

The new tool – developed by digital mapping specialist MapData Services (MDS) – maps household expenditure on products such as tobacco, medical care, gym membership and fresh food, to give health funds a unique insight into their customers’ lifestyle choices.

The revolutionary new approach to health cover comes amid media reports that policyholders are dumping their coverage in response to this month’s 6.2 percent premium hike, which added around $200 a year to an average family policy.

The Sydney Morning Herald recently reported a ‘huge’ number of policyholders have cancelled their insurance but remain in the market for a better deal.

MDS General Manager Cassandra Barker said in such a highly competitive market – where customers can easily switch funds – it is vital health insurers tailor their services to better meet the needs of their customer base.

“The expectations of today’s consumers are higher than ever before – with policyholders demanding their needs to be met in an affordable way,” Ms Barker said.

“To address this demand, we’ve developed a tool which takes the guesswork out of how policies are shaped, by providing insurers with an enhanced level of information about their policyholders.

“Using the tool, insurers can combine their own information about a policyholder with our new spending habits data set and other information sources, such as real-time ‘wearables’ data submitted by policyholders who want their healthy lifestyle taken into account.

“By doing this, they may identify a policyholder who’s likely to invest in healthy food and gym memberships and offer them a discounted rate on hospital cover.

“Likewise, they could pinpoint high-risk consumers, who make poorer health choices, and offer them more comprehensive cover.

“Ultimately, this new tool enables a dynamic, multi-layered picture of a policyholder to be created – so insurers can offer an appropriate level of coverage without unnecessary extras.”

The new tool is populated with authoritative household expenditure data from the Australian Bureau of Statistics to reveal the spending habits of Australian localities across 12 categories and 400 commodities.

“Insurers can use this information to study spending patterns and lifestyle factors to determine where people with healthier lifestyles live,” Ms Barker said.

“This can help insurers target new markets in low-risk geographical areas.”

 

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