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March 12th, 2010
Leading indicator continues to accurately anticipate actual AEP switching rate Author: Deft Research
Between 2006 and 2008, the Loyalty Index varied inversely with Switch Intention. In 2009 the pattern was broken — Loyalty and Switch Intention rose together.
Switch Intention remains a reliable leading indicator of actual health insurer switching by senior consumers.
Implications:
The contradictory combination of greater loyalty and high rates of switching means Medicare consumers are more active.
-Over four years, the red line is increasing.
-Future competition for customers will not just be a body count. Health insurers who understand their market well enough to target and keep the value shopper will enjoy better profitability than insurers who appeal to the frequent switcher.