Creating Innovative Coverage Options

CONDUSEF presented its results regarding a simulator of the cost of major medical expenses insurance, in which it analyzes the eight insurers that concentrate 67.3 percent of the domestic market. According to this commission, this exercise is done to demonstrate the importance of having this type of coverage to avoid a significant imbalance in individual or family economy due to an emergency. Results show that the most expensive insurance has a price of MX$40,487 (US$1,919.95) per year, with a deductible of MX$10,000 (US$474.21) and an insured sum with basic coverage of MX$100 million (US$47,422.50).

In Mexico, families do not normally see insurance as a primary need. In many cases, this is due to a lack of information. However, in other occasions, clients will turn away from insurance because it fails to cover their needs. “The problem is that private insurance only focuses on accidents and major medical expenses but not on pre-existing conditions, which is one of the main reasons to have an insurance,” explained Alejandro Sancen, Director General of MASZ, during an interview with MBN.

Sancen also mentions that the insurance sector has not yet turned to the low-income sector of the population, which represents most of the country. Eduardo Lara, Vice President, Head of Health Latin America at RGA, told MBN that “private insurance companies have been focused on the upper and upper middle-class segments, where a broker or agent model usually works well.” Lara adds that technology is a great support to change this reality. “When thinking about mass products, we need to think about other distribution channels. Smartphones and other technological features will enable us to participate in other segments while reducing our costs.”

What role does the public sector plays in this? “The success of private health insurers depends on the public health system,” Lara explained. In countries like Mexico, the private health insurance sector is 100 percent voluntary. Private companies do not participate in Mexico’s public health system, which is why penetration is pretty low. In the country however, these is also a big gap between the formal and informal labor sectors, leaving a considerable amount of people without public healthcare coverage and without an insurance policy.

Companies focused on creating assistance programs, like Assismex for example, target this segment of the population. “To deliver high-quality accessible healthcare services, we built a private medical network to work as an assistant to help eliminate the issues resulting from the highly segmented healthcare access in Mexico,” said Sheila Jasso, Director General of Assismex, during an interview with MBN.

Others, like Plan Seguro, are taking advantage of technology and of the new tools that new generations are exploring. “We offer flexibility and variety that allow users to choose the policy that best meets their needs, without having to pay for extra services that are not going to be required,” comments Salvador Arce, Director General of the company. This flexibility does not eliminate traditional policies. Arce said that the use of technology helped the company realize the needs of their users, allowing it to offer much logical policies that people are willing to pay. Moreover, the company has included a digital test to create customized options for each person.

MASZ, on the other hand, approached a neglected segment of the population – chronically ill patients – with innovative policies that reward patients for showing health improvements. “With cancer patients, we evaluate their case and the status of their disease to offer a certain level of coverage,” told Sancen to MBN.

COVID-19 is expected to change this sector and increase the number of policies sold. However, creating policies will take further studying of targeted groups “to offer good coverage that is also sustainable over the long term and profitable for the insurance company,” said to MBN Omar Viveros, Director of Health Benefits at Willis Towers Watson.