Brand Review Health Insurers: which brand claims the strongest mental position among health insurers?

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

Tied for first place are the needs for “good value for money” and “good coverage.” As many as 90% cited these as the most important reasons for choosing health insurance. This represents an exceptionally high level of relevance compared to other industries, making “good value for money” and “good coverage” the most important needs among consumers. This means that a health insurance provider must definitely be top of mind regarding these two needs in order to maintain or gain market share if it is not considered a top choice in these areas.

Switching and price

Among consumers, 2% say they want to switch providers. 15% are undecided and may want to switch. In 2021, the industry recorded a 6.7% switch rate. This year, the polycrisis appears to be a catalyst for those switching: 21% want to switch due to rising energy prices (see Figure 2). Among consumers with an average level of education, this figure is highest at 27%. This aligns with the observation that median incomes are now being impacted by higher energy prices. In 2022, inflation and the energy crisis could lead to more people switching than before. This year, the cost of premiums will play a greater role in the decision to switch to a different health insurer.

Figure 2: Triggers switching health insurance.

Health insurance market shares

Brands are measured based on consumer needs, and consumers associate specific brands with those needs. So, for “good value for money,” the analysis identifies which brands consumers associate with this trait. This process maps out the mental market share for the brands in question. In the case of health insurance, consumers have no alternatives outside the traditional industry, which makes the market much more homogeneous to measure. In our previous brand review, for example, KLM (airline) competed with Landal (vacation park) in the travel industry. A nice bonus in the health insurance market is that only brands offering the same product compete with one another, and that mental market shares can be very well compared to actual purchasing behavior as a measure of real market share (see Figure 3 below). This analysis provides a valuable prediction of consumers’ future purchasing behavior, with one key determining variable: the premium rate set in mid-November.

Figure 3. Mental versus real market share health insurers

First strategic exploration in 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 price buyers in health insurance land

Price is often a factor in choosing a brand when making purchases, though there are certainly significant differences across industries. In the case of health insurers and the upcoming economic uncertainties, price (low premiums) is highly relevant (85%), making it a key reason to purchase. At 94%, the relevance is very high among young people (ages 18–34). For those aged 55 and older, it is 75%. This significant difference is an area 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 Category for the 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+

Competition

In a competitive analysis, the number of brands considered is measured across the various CEPs. If many brands are considered within a category, the (mental) competition is greater, because consumers are then considering multiple brands. For the health insurance industry, this study measured the 11 most frequently mentioned health insurers and 11 CEPs. In this industry, the number of competitors ranges from 2.8 to 4.5 brands per CEP. In terms of ROI, the specific need you’re targeting can make a significant difference. The least competition is in the “personal attention” category, and the most is in the “well-known” category.

Race to the end of the year

CZ and VGZ are under psychological pressure but have the advantage of a strong market position in terms of “good coverage.” Opportunities exist for DSW, as their customers are extremely satisfied with the “personal attention” they receive, while the rest of the market does not see it that way. The polycrisis is an additional reason for consumers to switch providers; the 2021 rate (6.7%) is expected to be exceeded. Price plays a major role in switching and choosing health insurance, given the high relevance of consumers’ needs combined with triggers to switch. It will be a busy end of the year for customer service departments at health insurers.

Structure 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 share 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.