Standard Life: encouraging older consumers to invest in health insurance

This first one is about the Development of Standard Life Healthcare's EspritHealth. EspritHealth is a private medical insurance product marketed by Standard Life HealthCare aimed at those aged 55 and over. It was launched in January 2006, and the research I'm going to talk about was actually conducted in the autumn prior to the launch, and informed the launch in terms of development of the product and the communications, and the strategy surrounding the launch of the product.

Standard Life Healthcare are one of the leading providers of private medical insurance in the UK. When they approached me to undertake the research, they came with certain specific objectives. Firstly, they needed to understand the motivations and barriers to buying private medical insurance amongst UK consumers aged 55 and over. They knew already that their existing general product wasn't meeting the needs of this target audience, because their market share was well down on their April market share amongst this particular age group. They wanted to understand that purchasing process. What were the steps they took? What were their influences on their purchase? In particular, what was the role of the brand in their choice of provider? They needed to understand their needs from an emotional perspective and a product perspective. And finally, they had a range of product ideas that they thought would appeal to 55 plus market, but they needed to gain reaction to them to see if they indeed did meet their needs.

I purposely distilled the results of the research. There are four key points that I think you'll be interested to hear about. Firstly, the needs of 55 plus are different from younger people. By that age, most do not consent to have come up with for things like pregnancy, parent accommodation when staying with children in hospital or for IVF. Product needs of those 55 and over also change as they get older. At 55, most people would expect to have fully comprehensive private medical insurance. But as customers get older, they experience premium increases and start to re-evaluate their needs. Some can afford to pay for these premium increases but others start trim their cover in order to contain their costs. The sort of areas that they are prepared to trim are things like paying for some treatments themselves. For example, physiotherapy or alternative therapies. Taking out an excess, like you have the car insurance or home insurance, or limiting things like outpatient cover, or having weight plans for treatment where NHS waiting lists are six weeks. But the basic cover that everybody felt that they would require was a quick diagnosis with a consultant and associated diagnostic tests that shows X-rays, MRI scans, blood tests, and subsequent treatments if required in a private hospital. Brands do have an important role to play in the decision process and it's very important that brands operating in this marketplace have integrity. It's also important to have messages that the brand can keep premiums under control and to quote one respondent, "This is much more sensitive area than insuring your house or car. This is after all about human beings."