A retail outlet at the unassuming shopping centre in the middle of Andover, the quiet market town in Hampshire, isn’t typically the sort of place where I canvass the thoughts of chief executives of major health insurers. But, Simplyhealth’s ever-reliable PR team assured me, their boss was sure I would find a visit enlightening.
They were right. The shop, a bright, inviting place, is in fact the physical embodiment of Totally Active, the online provider of health and support products for the elderly and disabled which Simplyhealth acquired in 2006. It opened in November 2007 and shows, Des Benjamin tells me, just what his organisation is about – people, their health and their healthcare needs.
In fact, showing what Simplyhealth is all about is Benjamin’s key challenge for 2009 and beyond. The parent company of a number of well known cash plan, private medical insurance (PMI) and healthcare trust providers is currently in the middle of a major rebranding exercise which will see individual names phased out, to be replaced by the overarching Simplyhealth brand.
It’s not just a major decision – it’s a very brave one too. And it’s not the only one that Benjamin has made in recent times, with Simplyhealth closing down its occupational health business, Vitality Healthcare – which operated under the Adastral Health brand – in December of last year.
THE REASON BEHIND THE REBRAND
So why is the rebranding such a brave move? Well, each of the individual organisations have, over time, built up excellent reputations with consumers and brokers alike. In fact, one of those organisations, HSA, is a hugely successful cash plan provider whose brand was not so long ago officially recognised as the second most recognised in the health insurance industry, after Bupa. Last year, BCWA won broker plaudits by scooping the Health Insurance Company of the Year Award. So why take such a gamble?
“On their own, the brands could have kept going almost indefinitely but they weren’t necessarily providing what the future of healthcare looks like,” Benjamin explains. “Together we’ve got scale that allows us to develop new products, put in new systems and allows us to tackle the agenda of healthcare in the future with some considerable ability.”
Simplyhealth’s broker partners stand to benefit, too, as there will be greater name awareness among their clients.
“As it stood we couldn’t do national branding for each of the separate brands,” he says. “Once decision makers see national brand advertising for Simplyhealth and we have a high name awareness for that, then the familiarity will increase and there won’t be the ’who are they?’ factor which has held some of the brands back in the past.”
It is not a decision that has been taken lightly, Benjamin says, explaining that each of the brands has a “fundamental” position of trust with its customers.
“We mustn’t compromise that trust in any way,” he says. “Nothing will change except the name. We are confident that what we have done in the past is going to feed its way through to our customers. That trust will transition from the brands that have got us here over the last 137 years to the one that is being built for the future.”
Easier said than done, you could argue. But Benjamin denies that there are competitive tensions between the individual brands that will come under increasing strain as a result of the rebrand/merger. A relatively small number of redundancies were announced towards the end of last year but, Benjamin assures me, that was not about the rebranding/merger.
“I have had no issues bringing these organisations together,” he claims. “There is a very strong sense of purpose about what we’re here for. Combining them under the Simplyhealth flag is a rallying cry which brings what were disparate organisations together with one purpose. That’s the beauty of working within this mutual structure.”
While mutuality is absolutely integral to Simpyhealth’s ethos and values – and while it is striking a chord with those disillusioned by the behaviour of profit-driven financial services organisations – Benjamin is not, perhaps, as evangelistic about it as some of his peers sometimes are. Nor is he under any illusions that consumers and companies – and indeed brokers – are blindly seduced by the not-for-profit mantra. However, he claims that mutuality “de-tensions” profit versus service “in a way that is very constructive in healthcare”.
“It is not our job to convince the public that the mutual system is best,” he says. “It is our job to produce the best under the system that we can and if we do that we will pick up our share of the public confidence and the public vote. Under the structure that we have, there are a number of advantages that come to the fore. We can plan to the future, long-term. We can reassure our customers that we have strong reserves and we’re not taking the sorts of risks that some of the banks have taken and which have caused enormous distress.”
In spite of the widespread problems in the stock market and in spite of a 2007 which Simplyhealth itself described as “particularly challenging”, the organisation is in “very good” shape financially, Benjamin continues.
“We normally carry about £20m working capital in cash and we’re at £50m at the moment,” he says. “We may well increase that in the future. It means our reserves are not only strong but very liquid as well. If you know much about investments, you’ll know that’s a very good place to be at the moment.”
As a result, brokers and their clients should feel particularly reassured that Simplyhealth is more stable than some other financial services organisations, he claims.
“What brokers need at the moment more than anything is to know that the suppliers that they are recommending are fundamentally sound and with business credibility so low at the moment, that is important for any number of reasons,” he explains. “One is that you don’t want a supplier – particularly one that is looking after your staff – going under or failing to deliver a decent quality of service. Businesses are struggling on enough fronts and they need to know that the way their people are being looked after is fundamentally sound. Brokers and employers should take very good heart that as an organisation we are remarkably strong in the way that we are reserved and funded.”
Custmer service practicalities such as claims being paid must, of course, not be overlooked when bringing different organisations together, Benjamin continues. BCWA won the Health Insurance Best Customer Service Award in 2008 and brokers, no doubt, will be hoping that the merger to the Simplyhealth brand does not affect performance on that front in the years ahead. Benjamin is confident that the rebranding will in fact help the organisation’s individual units to work even more efficiently. He argues that by bringing together the different providers’ systems into one, Simplyhealth’s units will be able to deliver service more fit for the digital age.
“The platform that we’re moving all the brands on can do things for customers now that are part of their everyday lives,” he explains. “So if we want to communicate with them by email, by telephone, by television or by any other digital format, we’ve now got the data and the products onto a system that will enable us to do that. At some point in any industry you have to make a decision that you either live and die with what you’ve got or you have to migrate onto what customers are going to be doing for the next 25 years.”
Such an undertaking is, of course, no mean feat and Benjamin concedes that Simplyhealth – which is currently migrating its PMI business onto the one central platform – has “had its share” of teething problems. However, for the past two years, the central system has been handling 1.2 million customers and 15,000 claims a day and he is confident that the system is the right one for the years ahead.
“There is no perfect way of doing this but what we have done during implementation is to ensure that customers don’t suffer,” he says. “The way that the system has been issuing quotes has been too slow, the way some of our despatch work hasn’t been up to standard. We’ll get it fixed in short order.”
Bringing different systems – and different companies – together is, Benjamin says, “really, really complicated stuff” and he remains well aware of the potential pitfalls.
“It is exciting, but there are risks attached,” he says. “What you don’t want to do during a recession is create doubt. It’s hard enough for the public at the moment. But I sense that from talking with customers and our staff this is a good new position for us to take.”
Time, of course, will tell, but on leaving the Simplyhealth shop (you can check it out at www.simplyhealthshop.co.uk) in that unassuming shopping centre inAndover, you get the impression that he might be right. The Simplyhealth signage above the entrance already seems strangely familiar – a fact which isn’t lost on Benjamin.
“Simplyhealth,” he suggests, “is one of those nice names that you always thought you knew.”
SIMPLYHEALTH – HOW IS IT STRUCTURED?
BCWA offers PMI policies to individuals, families, and small and large companies throughout the UK. Currently has 120,000 customers, with the majority of policies being sold through brokers. Joined Simplyhealth in 2005 and is based in Bristol, where it began in 1935. BCWA Remedi was set up in 1985 in Reading, to provide bespoke solutions for large companies wishing to self-fund their employees’ corporate medical plans.
BCWA Medisure has been a provider of medical benefits and health risk management for over 20 years. It specialises in case managing access to medical treatment for corporate customers. HealthSure has a 130-year tradition of helping people and companies with their healthcare needs in the North West. It has around 160,000 customers and joined Simplyhealth in 2005. HSA provides health cash plans for individuals and companies across the UK. Originating in London, the home of HSA has has been Andover in Hampshire for 26 years. Currently has 870,000 customers. LHF Healthplans has over 200,000 customers, mainly in Yorkshire. Joined forces with HSA in 2002 to begin the creation of Simplyhealth. Totally Active – now known as Simplyhealth – is a national retailer of mobility and daily living aids with a comprehensive range of products. Joined Simplyhealth in 2006 and is based in Andover, Hampshire.
Over time, all of the units will be rebranded as Simplyhealth.