Every time I sit down for a coffee with a colleague, friend or associate, the conversation invariably leads to a mutual distrust and dislike of the insurance industry – ok not every time, but pretty often.
I have often wondered why we feel so hard done by when it comes to insurance and the multitude of products that are sold to us as a way to protect us from the perils of daily life – we humans really do battle, how we survive is anyone’s guess…
Murray Hewlett, Managing Director of Affinity Health offered to answer some tough questions – and hopefully put a little at ease or at least empower us to make more educated decisions when it comes to our insurance needs.
Q1: The insurance industry and any product that fits therein is often seen as less than honest, how did Affinity Health come about, especially in an industry that has by all appearances, reached full capacity in South Africa?
MH: We created Affinity Health to fix problems in the medical aid and medical insurance industries.
Medical aid is seen as too expensive in South Africa and medical insurance has a problem as it is an agreement between an insurer and the policyholder which doesn’t guarantee you admission into a medical facility. Generally you can’t claim until you know an amount, and you don’t know an amount until you have spent the time in the facility – this creates an ethical dilemma and a gap in the market between medical aid’s expensiveness and medical or health insurance’s inability to accept a claim. This is where Affinity Health stepped in providing medical aid service through the health insurance model.
Q2: What is the difference between Medical Insurance and medical aid?
MH: Medical aid is indemnity cover against medical expenses. In theory they cover you for all your medical expenses, but in practice they don’t. Medical insurance in a defined benefit cover, example, if you go for a tonsillectomy, we’ll pay R 20 000.00, if the cost is R 15 000.00 you score, if it’s R 30 000.00, you have to find the difference.
All the benefits are pre-defined whether it is a surgical procedure or days in hospital, which means that the member knows what they are going to get and can then manage those expenses accordingly and can even negotiate with the facility based on those pre-defined amounts and in fact we’ll negotiate with the facilities on their behalf through our case managers.
Q3: What does it take to stand out in the Medical Insurance silo?
MH: Customer service, great premiums, having the ability to have our members admitted into a medical facility and having a national network of Doctors, Dentists, Pharmacists, Radiologists, Pathologists and Optometrists.
Q4: I don’t really know of another business sector in South Africa that has such little loyalty. Why is there so much churn or brand swapping in the insurance market – it seems there is an inherent lack of trust from the general SA market?
MH: I don’t think there is lack of trust, I think that it is just indicative of a market that is hyper competitive. We have seen the same for the cell phone companies, the banks and the same in the insurance space over the last 20 years. Churn is important because it allows insurance companies to compete with better and better products. If you look at South Africa’s insurance environment versus global insurance markets, due to our competition our products are first world and better. The competition is good for the consumer because it drives prices down and benefits up.
Q5: How do you believe Affinity Health builds the trust that is needed for a long-term relationship with your customers?
MH: We spend a lot of time educating our customers about how the product works and why it works to create realistic expectations. One of the biggest reasons for insurance policy cancellations is people buying products that they don’t understand, creating unreal expectations, so when the product doesn’t deliver on those expectations, the customer cancels the policy blaming the service or product provider.
Q6: It seems that the media attention on the POPI Act <http://www.popi-compliance.co.za/> has gone quiet. Everyone, especially the public seemed so excited by its sign off in parliament; finally the public had a way to get back at these spammers and hold them accountable; but an age seems to have passed since then and it feels like its business as usual for the corporate culprits – how will the POPI Act affect insurance companies like yourselves if at all?
MH: The POPI act is designed to protect the consumer against unsolicited marketing from a digital perspective. We’ve seen from overseas cases that opt-in regimens do not offer the consumer more protection, all they do is increase the price of marketing which is then passed down to the consumer with more expensive products, so we don’t see POPI having any effect in digital marketing in the country in the long term.
Q7: So how should companies go about doing their digital marketing ethically?
MH: POPI is designed to protect the information from getting into criminal hands rather than to stop people from receiving marketing information.
Every time the DMA advertises the OPT out list, they don’t receive an increase in opt out requests, it makes humans feel disconnected. Most people would want to be able to choose which types of messages they receive as opposed to being completely opted out, so knowing which people want which type of information is key, of course, though, how do you know that unless you ask?
Q8: Dealing with so many customers, as you do, there are bound to be haters and people who are disgruntled, either through genuine lack of service or from a dissatisfaction on the outcome of their query; how does Affinity Health handle negativity from customers?
MH: We ensure that all complaints are answered no matter where they come from: Hello Peter, Facebook, e-mail etc… Sometimes, though, you just get a customer who is unreasonable and who just wants to vent; but we do spend a vast amount of time and energy answering as many of the queries as we can.
Q9: What is next for Affinity Health? For the want of a better cliché, where do you see Affinity Health in five years?
MH: We wish to grow the brand and the company, we believe that we are in a position where strategically we can grow at an accelerated rate through 2016 / 2017 and of course we will continue delivering top notch service and products to our customers over this period.