Executives at a web-based health insurance broker, eHealth, say the insurers they work with are starting to think harder about keeping customers, not just increasing sales.
Scott Flanders, the Santa Clara, California-based company's CEO, talked about the new focus on enrollee retention Thursday, during a conference call with securities analysts.
EHealth held the call to go over earnings for the second quarter, which ended June 30.
"Based on our recent conversations with carriers, we expect that insurance companies will be increasingly evaluating broker performance on quality of their enrollments, including retention rates and customer satisfaction in addition to volumes," Flanders said during the call.
Flanders said eHealth is acting on that belief by having new agents spend more time getting trained, even if that cuts into third-quarter sales and earnings, in an effort to improve service in the fourth quarter.
For health brokers, the fourth quarter of a year is critical, because the annual enrollment period for Medicare Advantage plans runs from Oct. 15 through Dec. 7. The annual enrollment period gives users of traditional Medicare coverage a chance to sign up for Medicare Advantage plans, as well as giving Medicare Advantage plan enrollees an opportunity to change their coverage.
Flanders said eHealth is also working to increase the number of people who sign up for coverage through eHealth websites on their own.
Attracting customers who sign up on their own costs more than attracting other customers, but customer care and enrollment costs for those customers are lower, according to John Pierantoni, eHealth's chief accounting officer.
Flanders said customers who sign up for Medicare plans through the web are also more likely to stick with their coverage than other customers.
Here's a look at second-quarter earnings for eHealth and other companies that sell and create health insurance.
EHealth (EHTH)
EHealth has reported an $18 million net loss for the second quarter on $97 million in commission revenue, compared with a $3.4 million net loss on $89 million in revenue for the second quarter of 2020.
Commission revenue increased to $90 million from $81 million.
