Not your Grandmother’s Medicare…But still your Grandfather’s Agent
Adrea and I recently attended a conference for Medicare Supplement. As we looked around the meeting rooms during the sessions for Agents only, it was obvious that the Agents selling this product closely resembled the eligible population. These agents looked like the text book definition of an insurance agent. They were definitely the kind of man my grandfather would have used to buy insurance.
With our expertise in the Medicare Supplement market, we felt that the way the agents looked and approached their business is becoming obsolete. One of our more intriguing conversations was with a younger, female agent. She said that her main clientele were women. Her book of business depended on word of mouth. Once she scheduled an appointment with a prospect, she said her sales rate was close to 75%. Her success was based on the comfort level and connection of dealing woman to woman.
The seniors of today are different from those from 5 or 10 years ago. Gone are the images of seniors in a nursing home, or taking numerous medications. Today’s Medicare population is vibrant, independent, focused on wellness and up to date with the latest technologies. Selling Medicare Supplement insurance to these consumers requires a more current approach.
It is critical to understand what the Medicare marketplace looks like today. Although the Millennial generation has just become the largest generation, outpacing Baby Boomers, there are still 10,000 Americans turning 65 each day. In addition, 3.5 million people retire each year. These new retirees are most likely leaving their employer’s coverage and will be in need of a supplemental policy.
Even as today’s seniors are more active than previous generations, health care costs are a still a financial concern. The total cost for a couple over 65 for medical treatments over a 20 year span is $218,000. The cost of prescriptions doubled in the last 7 years. This impacts seniors more than any generation, as they are responsible for 77% of all drug purchases, and are usually on fixed incomes. The cost of health care is a top concern for seniors, and retirees in particular.
Supplement sales are no longer dominated by the agent sales force. Consumers can choose to speak to an agent if they want. They are also being targeted by the insurance companies who are marketing directly to this population. During the last four months of 2015, which includes the time leading up to and including the Annual Enrollment period, 70 million mail pieces were sent to consumers age 64 & 6 months and older. This represented 50% of the overall mail volume for all of 2015. Just 5 years ago, in 2010, the mail volume was 2.5 times larger, with over 328 million direct mail solicitations reaching the Medicare eligible population. The decrease in mail volume is not due to a decrease in the senior population. In the last 5 years, more carriers are using a multi-channel approach to marketing Medicare Supplement.
Consumers can also research the product online or call a carrier directly. In addition to direct mail, a search in Google for Medicare Insurance yields 68,000,000 results. DRTV ads for individual carriers as well as insurance quote aggregators run all year long. The consumer is now empowered and can take charge of the enrollment process.
For individuals who are aging in to Medicare, a softer approach to selling this product is required. We believe, for this population, there are four key components to capturing new insured:
- Provide education on the product. Medicare Supplement policies are complicated, especially when consumers do not understand the difference between Part A & B and the supplemental plans.
- Build brand awareness before eligibility period. Most consumers do not know what the product differences are from carrier to carrier.
- Establish a relationship with the prospect. During this time, the consumer will receive more direct mail solicitations, emails and phone calls than ever before. Having an existing relationship before this starts will help sell policies.
- Offer guidance. It is a complex product and process. Being a trusted advisor will pay off for this policy and future cross sell opportunities.