In focus: Cash plans– a new hierarchy emerges

Competition in the cash plan market is heating up, with the dominant players coming under pressure from smaller rivals. Edmund Tirbutt considers what implications this might have for the industry

The times they are a changing…. even in the century-old health cash plan market. We are no longer talking only in terms of the same “Big Three” providers of HSA, HealthSure and Westfield Health. A rebranding exercise by HSA and HealthSure parent company Simplyhealth will eventually phase those names out, while both they and Westfield Health are coming under increasing pressure from other less well known brands.

Simplyhealth’s strategy seems strange in light of the fact that HSA was probably the only pure health insurer of any sort other than Bupa that could boast significant brand awareness among the public. But, according to Raman Sankaran, sales and marketing director at Simplyhealth, it has more to do with method than madness.

He says: “The HSA name has grown and has by far the largest brand awareness and customer base but the move to Simplyhealth will make us more joined up and able to offer one point of contact to intermediaries. We are aligning our business behind our co-distribution channels and therefore looking to put the right service and support structures behind servicing both direct or corporate business, whereas before it was all brand based and far more complex. The idea is to transition customers from HSA towards Simplyhealth and a lot our marketing effort will mention the HSA name for the purpose.”

Simplyhealth has launched a new corporate product (see box page 34) to capitalise on the considerable momentum that it hopes will result from the rebranding, but the jury will remain out for some time with regard to the position that the new group is likely to claim in the cash plan market hierarchy.

A couple of years ago one might have viewed Westfield Health as being a dead ringer to take advantage of such a restructuring and to emerge as a clear market leader, but murmurings in the marketplace suggests that it could benefit from taking a step backwards and examining how it could reinvent itself – at least to a degree. Communications with both the media and the broking community have been considered decidedly stale since the company started outgrowing its rising star status – a mantle that has been usurped during the last two years by Health Shield.

Tom McGuinness, business development and HR director at national specialist intermediary Premier Choice Group, says: “There is definitely complacency among the major players and certain providers have got to realise that they are only as good as the next piece of business they get. More and more of the larger intermediaries are only finding time to shop around between two or three major providers and they are choosing these on the basis of those prepared to have a businesslike conversation. Health Shield and BHSF are the two players who are undoubtedly making progress, and the established market leaders will have to take note of them or they will get toppled from their perches.

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