Switchers less concerned with cost of health insurance

People looking to switch health insurance providers are for the first time more likely to examine benefit gains than financial gains in what could be a symptom of the State’s improved economic conditions, according to major research.

The finding is contained in a report by the Health Insurance Authority (HIA), which is the statutory regulator of the sector. Its research survey involved a State-wide sample of 1,891 face-to-face interviews conducted in September and October last year.

The research suggests the dynamic behind the propensity to switch providers is changing. Among those who have switched, 54 per cent mentioned price as a factor in 2017, which is a significant drop from 65 per cent in 2015.

The HIA noted that the change in motivations for switching may be down to “improving economic conditions”, or arguably that the price of policies on offer are converging. Cover and service considerations are said to be becoming “more important”.

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Also, for the first time, those with insurance are now more likely to examine benefit gains (33 per cent) if they were to consider switching, compared with 32 per cent examining financial gains.

However, the research found evidence that switching providers may have “plateaued”. Fewer than one in four (22 per cent) have ever switched, similar to 2015 when the proportion was 24 per cent.

Serial switchers

In addition, there are few “serial switchers”. Of those who have ever switched, a sizeable majority (63 per cent) have only done so once. Among those who have never switched, just 10 per cent have even considered it, down from a high of 20 per cent in 2013.

“This is also against a backdrop of a growing perception that the switching process is becoming easier,” according to the HIA, which said six in 10 believe the process is “fairly easy” or “very easy”.

“VHI tends to leak customers more, which is unsurprising given its legacy within the marketplace,” it noted.

The HIA said the annual cost of a policy has decreased slightly compared with 2015, with the average price now at €1,858, down from €1,925.

Additionally, the proportion of those who have downgraded their plan over the past two years has decreased, down from 20 per cent in 2013 to 11 per cent last year. Similarly, 10 per cent have upgraded their plan compared with just 5 per cent in 2013.

Looking to the future, a modest 6 per cent plan to upgrade their policies, although this has increased significantly from just 2 per cent in 2013. The proportion planning to downgrade is at 4 per cent, down from 9 per cent in 2013.

The number of people who have insurance has increased by 2 per cent this year to 43 per cent of the population, “broadly reflecting more buoyant economic circumstances”.

The HIA said the research indicated that those with insurance are more likely to be more affluent, white-collar workers, whilst those from more manual professions or those reliant on State benefits are significantly less likely to have cover.

VHI remains the largest provider of health insurance, and accounts for more than half of all policies. Laya has increased its share of the market significantly, and now has 27 per cent of the market.