The respondents for this June 2010 study will be U.S. citizens or permanent residents, aged 63 or 64 (excluding those who will receive their health benefits through a group retiree or military program after age 65).

The AGE-IN STUDY is part of Deft Research’s Senior Market Intelligence Service. Each year, clients of this service receive three full primary research reports illuminating consumer activity, loyalty, and perception among seniors and age-ins.

This study will focus on age-ins’ plans for the future. We will ask respondents about their plans for retirement, health insurance, and also get a picture of their income sources after retirement. We’ll also look at their preferences for various benefit packages. The data will be enhanced with consumer segmentation data.

The AGE-IN STUDY is the foundation for regional market segmentation projects. These projects are customized as per client need.

For More Information
Richard Hamer, Principal
612-436-8318

George Dippel, Vice President Client Services
262-697-1370

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.

Deft Research’s National Senior Loyalty Study was conducted on-line in September, 2009. 3,492 seniors (aged 65 or more) responded to our survey. The results were released on November 12th. 2009 is the fourth year of the study and interesting views of industry trends are available.
This EXECUTIVE RESEARCH BRIEF focuses on Humana’s path to the present. In the graph below, we present four years of Humana’s MAPD Loyalty Index and Switch Intention data.

HUMANA MAPD LOYALTY AND SWITCH TREND

SOURCE: DEFT RESEARCH, 2009

The graph shows that the loyalty of Humana’s customers has varied inversely with the switch intention percent.

In 2009 both Loyalty Index and Switch Intention indicators for Humana are above the industry averages. This is a paradox, their customers are more loyal than average but also have a higher likelihood of switching. The National Senior Loyalty Study 2009 suggests that Humana has attracted active consumers. These are consumers who, despite loyalty, remain shoppers and continue to look for health insurance that suits them even better.
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Generating Loyalty

The loyalty study identified six top attributes for generating loyalty. If, either through experience or promotion, customers come to believe that their insurer is better than competition regarding these attributes, they are likely to be loyal customers and less likely to switch. Below, the six attributes and Humana compared to the overall MAPD industry.

HUMANA AND SIX TOP ATTRIBUTES FOR GENERATING LOYALTY

SOURCE: DEFT RESEARCH, 2009

Humana’s % Better Scores are considerably higher than average for understanding the needs of seniors and having honest sales people. But customers are less likely to view Humana as better than competition at offering lower copayments, easy paperwork, or early detection programs.

The National Senior Loyalty Study’s Humana profile does show one unique theme pointing to the development of customer loyalty. Humana’s % Better Scores are much higher than average when customers assess the company’s communications with them and the information provided to help them save money on drugs.

Helping seniors watch their money is part of Humana’s brand image and attractiveness to active shoppers. But is it enough to keep customers loyal?

Did you know that over the past year, the percent of seniors with some intention to switch health insurers increased from 21% to 27%? Knowing this alerts you to potential customer retention issues, and raises concerns over “what should be done?” The National Senior Loyalty Study 2009 gives you a relevant and necessary picture of customer loyalty and switch intention that will help you make informed decisions about retaining your own and attracting your competitors customers.

What is the National Senior Loyalty Study? The National Senior Loyalty Study is the largest study of its kind to track and measure senior customer loyalty, switch intention and market differentiation among health insurers.

Not only does the 2009 National Senior Loyalty Study equip and arm you with the best model for controlling disenrollment and increasing customer loyalty, it also gives you a better idea of how your competitors are doing.

You can phone, fax or e-mail us to get the full report, due to come out by early November.

The National Senior Loyalty Study reports an increase in our Senior Loyalty Index coinciding with a paradoxical increase in the percent of consumers with some intention to switch health plans in the coming months. In other words, senior consumers are as happy with their health insurance as ever, but that loyalty is not keeping people from staying on the lookout for something new.

Why? When our analysis is finished, we will show which of 53 market differentiators are associated with loyalty and switch intention. Separate analyses will be performed for MAPD, Medsupp, and PDP.

The analysis will also show how different competitors are generating loyalty among their customers.

We will have perspectives from hundreds of MAPD and Medsupp consumers indicating how top competitors are generating loyalty or how they are failing at it.