Online Health Insurance Market Expanding
As the health insurance industry turns increasingly towards consumer driven models, the presence of the health insurance industry online is also increasing. Over the next few years the health and medical insurance industry is expected to steadily increase spending to advertise to online health insurance consumers.
It is expected that health insurance companies will spend a total of $980 million advertising online in 2007 to entice more consumers to shop for and apply for health insurance products online. Such spending accounts for almost 30% of all online advertising spending by financial services companies. By 2011, those figures are expected to be $2.3 billion or almost 35%.
This despite the fact that a recent survey found that consumers’ experiences looking for and purchasing online health insurance have been mixed at best. Consumers want to use the Internet to research and make their health insurance decisions, yet they expect to have the same ease of use experience with an online insurance site, as they do on any other retail shopping site. This has not been the case according to the report produced by eMarketer entitled "Insurance Marketing Online: Meeting Customer Expectations."
The main issues consumers had with online health insurance sites was a lack of transparency and privacy issues, as well as an overall feeling of poor design and functionality on most sites. The report stated that almost a full one-quarter of individuals that logged onto a site with the intentions of applying for online medical insurance abandoned the application before completion.
Yet insurance companies will spend millions to advertise online, primarily targeted at the first wave of retiring baby boomers. The spending increase is also in anticipation of a more consumer centric health insurance model. The industry sees the healthcare insurance market inevitably transitioning from wholesale to a retail environment. Indicated by the decrease in employer-sponsored medical coverage and an ever increasing interest in High Deductible Consumer Driven Health Plans and Health Savings Accounts since their introduction several years ago.