The health insurance industry is highly competitive with over 25 companies fighting for a larger share of a stagnant market. The number of people with health insurance is in steady decline – half a million fewer people are covered today than in 1990.
The only way to win a bigger slice of the cake is to come up with a policy with a difference; something that catches the eye and interest of both insurance intermediaries and the general public.
One company that stands out by consistently reporting a steady increase in individual business is OHRA, owned by OHRA Verzekeringen en Bank Groep BV.
This year, the number of policies taken out increased by 34% compared to the previous year. The parent company is the second largest health insurer in Holland, a country where a large percentage of the population has health insurance cover. There is no national health service as such.
The UK boss of OHRA is 61-year-old David Potter, who has been running the company since the Dutch parent decided in the late 80s that it wanted a British presence.
“We only started to gear up for business in 1992 when we built up a good relationship with the intermediary network, Countrywide. It is our philosophy to sell through insurance intermediaries – in fact 85% of our business now comes through this source. We believe it makes a lot of sense for individuals to buy health insurance cover through professional advisers. It is such a complex marketplace with so many different policies on sale that it is essential people are properly advised,” he explains.
OHRA pays between 25% and 30% initial commission and between 5% and 15% on renewal business, depending on volumes.
Potter says: “We can afford to pay a high level of renewal commission because we don’t have a sales force. We calculated that it would cost us around £1m a year to run a direct sales force so we decided instead to pay attractive commission rates. We monitor sales figures and reduce rates if levels are not maintained.”
So what does OHRA have that makes it stand out in this crowded marketplace? “We have three unique selling points,” says Potter. “First of all we make only one age-related increase on our original policy and none at all on the products we have launched in the last couple of years. Our second USP is that we have always covered the five main therapies of complementary medicine treatments and do so without a referral from a GP. Our third big attraction is our own-risk discount system which we have also adapted from our parent company’s policies.”
This discount system works on the basis that you can choose to pay up to 50% of your premium as an excess. For example, if the annual premium is £1,000, you will pay a maximum of £500 towards the cost of treatment in any one insurance year. In return, the premiums will be discounted by between 37.5% and 45%.
Running a fast growing company like OHRA looks more than a full time job, but Potter is adamant that he is not a workaholic. “My wife and I are keen walkers, there is hardly a stretch of the coast in this country that we have not walked. This year we spent two weeks walking the Breacon Beacons, in lovely stretches of countryside,” he says. Potter also confesses a passion for gourmet food and fine wines.
He and his wife Rita live in south Hampshire where he says some excellent restaurants serve food that would make London restaurants sit up and take notice. His current favourite is the Hotel du Vin in Winchester – he is still salivating over a confit of duck he had recently. “My other favourite pastime is operating radio controlled model aircraft,” he comments. He is particularly keen on gliders – he has one that is a quarter of the size of the real thing – and says it is very relaxing to spend several hours controlling their flights.
So what sort of impression has OHRA made on the health insurance market? According to one of the leading health insurance intermediaries, George Connelly of Health Care Matters: “OHRA is an excellent company – we like the products and in particular the fact there is only one or no age related premium increases.
Another unique feature is it covers complementary medicine without referral from a GP. When talking to clients we always give them two or three companies to choose from, pointing out special characteristics as well as costs. It is interesting that so many of them opt for OHRA.”
OHRA is among the top six companies in the individual health insurance market, excluding corporate business. It has no plans to expand into the corporate sector, but offers cover along the same lines as portable personal pension plans. “We provide cover for employees, but it is their cover – not the company’s. When they leave to go to another company they can take their health insurance with them.”
Potter sums up: “Our plans for the future include extending our range of policies into the protection side of the insurance business – perhaps selling critical illness cover, long term care plans and even term insurance.” He is also keen to expand OHRA’s training and marketing sessions for insurance intermediaries. He now has two full-time staff involved in training financial advisers and is soon adding another person, as well as supplying support with lap top computers.