Brandreview provides strategic insight into the positions brands occupy in the minds of consumers. Each month, Validators takes a closer look at a different industry. This month it is the turn of the health insurance industry*, where the mental market position of 11 of the most frequently mentioned health insurers has been mapped. Brandreview is part of the Consumer Behavior Monitor, initiative of Validators and VU Amsterdam to measure the effect of consumer behavior since 2020.

The purpose of the survey is to identify consumer needs and perspectives. What do consumers base their choices on when choosing health insurance? Validators arrived at 11 key needs (Category Entry Points) for choosing health insurance. Of these, the chart below shows the two most relevant and least relevant needs.

Figure 1: Top 2 CEPs with highest and lowest relevance within health insurance

In shared first place are the needs "a good price/quality ratio" and "good coverage. These were cited by as many as 90% as the most important reasons for choosing health insurance. That is an absolutely high relevance compared to other industries, making 'a good price/quality ratio' and 'goodcoverage' the most important needs among consumers. That is, a health insurer definitely needs to be top of mind on these two needs to maintain or gain market share when they are considered less on these.

Switching and price
Of consumers, 2% say they want to switch. 15% consist of doubters who might want to switch. In 2021, the industry reached 6.7% switchers. This year, the polycrisis is proving to be a catalyst for switching: 21% want to switch because of higher energy prices (see Figure 2). Among average educated consumers, this is the highest at 27%. This fits with the picture that modal incomes are now being hit by higher energy prices. For 2022, inflation and energy crisis could cause more switching than before. Looking at premium prices will weigh more heavily in choosing another health insurer this year.

Figure 2: Triggers switching health insurance.

Market shares in health insurance
For each need, brands that are linked to this by consumers are measured. So for 'a good price/quality ratio' the link is made to which brands this is for consumers. Thus the mental market share is mapped for the brands mentioned. In the case of health insurance, there are no alternatives for consumers outside the traditional industry and that makes the market a lot more homogeneous to measure. For example, in our previous brand review, KLM (airline) competed with Landal (vacation park) in the travel industry. A nice touch in the health insurance market is that only brands compete on the same product and mental market shares can be very well compared with actual buying behavior as a measure of real market share (see Figure 3 below). This analysis provides a valuable prediction on the future buying behavior of consumers with a key determining variable: the level of premium set in mid-November.

Figure 3. Mental versus real market share health insurers

First strategic exploration in the health insurance market
Figure 3 shows that CZ narrowly claims mental leadership, but Zilveren Kruis and VGZ follow closely behind. In the leading group, VGZ has the largest difference between real market share and mental market share. With that, the brand has less growth potential than its share suggests. Conversely, it can be seen that DSW has a higher mental market share than real market share, this means there is growth potential. Potential customers do consider DSW, but ultimately choose a competitor. With an in-depth analysis on the position of the brand in relevant needs (CEPs) and reasons not to buy the brand, valuable insights are gained. This reveals how marketers can capitalize on these opportunities to grow the brand.

Category of price buyers in health insurance country
Price is often a reason to choose a brand when making purchases, by industry there are certainly greater differences in this. In the case of health insurance companies and the coming economic uncertainties, price(low premium) has high relevance (85%), i.e. reason to buy. At 94%, relevance is very high among young people (18-34). For those over 55, it is 75%. There lies a big difference that health insurers can target.

Zooming in on brands, DSW's average market share is 9% in the CEP low premium and in the 55+ age group it rises to 16%, a gain of 7% market share in this target group (see Figure 4 below). DSW thus gains substantially among the older demographic and we see the most shift in competitive position in this CEP.

CEP Low premium distribution for general target group

CEP Low premium distribution for those 55 and older

Figure 4. Mental market share distribution CEP Low premium and Low premium 55+

A competitive analysis measures the number of brands being considered in the various CEPs. If many brands are being considered in a category, then (mental) competition is greater, because then a consumer is considering multiple brands. For the health insurance industry, the 11 most frequently mentioned health insurers and 11 CEPs were measured in this study. In this industry, the number of competitors ranges from 2.8 to 4.5 brands per CEP. In terms of ROI, it can make quite a difference in which need you want to grow. The least competition is on "personal attention" and the most on "well-known.

Race to end of year
CZ and VGZ are under mental pressure and have the advantage of a strong market position on 'good coverage'. Opportunities lie ahead for DSW, as their customers are extremely satisfied with 'personal attention', while the rest of the market does not see it that way. The polycrisis is additional reason for consumers to switch, expected to definitely exceed the 2021 level (6.7%). When switching and choosing health insurance, price plays a big role looking at the high relevance of needs combined with triggers to switch. It will be a busy end of year for customer services at health insurers.

Brandview Academy on Jan. 17
If you want some more depth on this article, join us on Jan. 17 at our webinar Brandview Academy. In 45 minutes you'll be up to speed for the new year.

Set up Brand Review
In 2018, VU Amsterdam and Validators launched the Institute for Brand Analytics. The goal of this collaboration is to make brands steerable and market shares measurable in the minds of consumers. After four years of research on over 300 brands, we arrived at a method that could measure the strength of brands and make predictions about market share. Starting in August, a specific industry will run each month as part of the Consumer Behavior Monitor. First, an online qualitative preliminary survey tests consumer needs (CEPs) and then a Brand Review measurement.

*The fieldwork for this study ran through the end of October.

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Martin Leeflang

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